Big four Australian-owned banks hold 84% of lending, Reserve Bank data shows
Labour has promised to make it easier for new financial providers to challenge New Zealand's largest banks if it wins next month's election, set for 7 November, interest.co.nz reported.
New Zealand has 26 registered banks, but the market is dominated by four Australian-owned lenders: ANZ, ASB, BNZ, and Westpac NZ. Together they account for 84% of bank lending, according to Reserve Bank figures, while five New Zealand-owned banks hold about 10%.
"Labour will break down the barriers that stop new competitors taking on the big banks," leader Chris Hipkins said.
What Labour is proposing
The policy centres on helping smaller players scale up. Labour would create a new e-money licence for businesses offering digital wallets and payment services, with rules matched to the risks those services carry.
It would also require that smaller providers can use essential banking and payments infrastructure on fair terms. It would set a clearer route for innovative financial firms to become full banking competitors.
Other commitments include a secure, real-time payments system operating around the clock by 2030, and wider use of government-verified digital identity, so customers can switch more easily between banks and fintechs.
Labour's commerce and consumer affairs spokesperson Arena Williams said the party would make it easier for new providers to get access to the systems they need.
"If the big banks won't provide fair access, we'll step in," Williams said.
Kiwibank stays in local hands
Labour said Kiwibank had an important role in challenging the major banks. "Under Labour, Kiwibank will remain 100% New Zealand-owned," the party said.
National's finance spokesperson Nicola Willis has previously said Kiwibank will need more capital over the medium term, while also committing to keep it New Zealand-owned.
What the election means for advisers
Whether the policy is implemented depends on the election result, and the polls are mixed.
Roy Morgan's September poll put the National-led government on 52%, against 41.5% for the Labour-led Opposition, with Labour's own support at 23.5%, its lowest in two years. The latest 1News Verian poll, however, has the two blocs almost neck and neck.
For mortgage advisers, the proposals point to a potentially broader lender panel over time, and to easier switching for clients who refinance. Much would depend on how quickly any new entrants could build the scale and capital needed to lend competitively on home loans.
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