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21 March 2024

New Zealanders deserve much more from banks

We welcome the preliminary findings unveiled in the Commerce Commission’s draft report into personal banking services.

“We have long-standing concerns about the state of the banking sector in New Zealand, and agree swift action needs to be taken” said Jon Duffy, chief executive of Consumer NZ.

“The Commission’s preliminary findings support our view that there is limited competition, particularly among the major banks, and New Zealand’s banking customers suffer as a result.

The Commission’s draft report found the major banks in New Zealand are making consistently high profits.

The four biggest banks in Aotearoa are all owned by Australian parent companies and make up about 90% of the market.

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Consumers think banks charge too much

Our latest banking survey found three-quarters of New Zealanders agree that banks’ high profit levels show they are charging too much. The proportion of consumers holding this view has increased steadily over the past 4 years.

“We regularly hear the Australian-owned banks make much more money from their customers here when compared to Australia – that does not feel right.”

Switching as a solution

Our research has also revealed that people think switching banks is difficult; although when people actually make the switch, they find the process easy.

“Switching levels are worryingly low in New Zealand. Our research found that over the past year, only 3% of New Zealanders switched their primary bank . Eighty-four percent of people have been with their bank for more than 5 years.”

“Low levels of switching by customers has allowed big Aussie-owned banks to rest on their laurels and meant they can get away with lacklustre innovation and service.”

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Lacklustre scam protections

Our latest research also found that more than one-in-ten households has lost money to a scam in the past year.

We are concerned this issue has not been given the recognition it warrants in the Commission’s draft report.

“Our banks are moving far too slowly to fight the growing threat of cybercrime that we all face.

“We need to digest the content of the report. However, we are surprised no link has been made between the major banks underinvesting in their systems and the volume of scam losses customers are experiencing. We will be submitting on this point, and others, before the final report is released.

“We are also concerned by recent comments from the government suggesting this market study could be scrapped before its final recommendations are made.

“It is vital this study proceeds to a final report. Highlighting the problems in the banking market and proposing solutions to fix them is just as significant for consumers as the Commission’s work in the supermarket sector.”

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