"We want to exit the debt, not the customer," manager says
Westpac NZ has introduced amendments to its bankruptcy policy, aiming to improve access to essential banking services for New Zealanders undergoing challenging financial situations.
The initiative comes in response to findings from the Westpac NZ Access to Banking in Aotearoa Report, released last year, which revealed that people declared bankrupt often faced account closures, leading to difficulties in opening new accounts.
The report found the substantial impact on marginalised groups and recommended greater flexibility and individualised consideration for bankrupt customers.
Louisa Brock (pictured above), Westpac’s manager for customer vulnerability and financial inclusion, highlighted ongoing efforts by the bank to address these issues, acknowledging the stress associated with bankruptcy and the critical role bank accounts play in people’s lives.
“Without a bank account, it can be difficult to access payments and benefits, or do things like pay your rent,” Brock said.
“We want to remove some of that stress and potential embarrassment by ensuring people who are experiencing financial difficulties can keep their day-to-day account and debit card. It’s important that everyone is able to access the basic banking services they need to live their lives.”
A 2022 survey by the Insolvency and Trustee Service indicated that 49% of respondents experienced bank account closures after bankruptcy, with 22% facing challenges in finding a new bank or credit union.
Westpac’s revised policy allows customers in bankruptcy to maintain operational transactional accounts, open new transactional or savings accounts, and retain or apply for a debit card.
Before the policy update, Westpac customers declared bankrupt could have their accounts closed, and new account openings were challenging for bankrupt customers unfamiliar with Westpac.
“It might seem a relatively small change, but it’s a change that can have a hugely meaningful impact on someone who’s going through the tough time of a bankruptcy, allowing them to get on with many of the everyday money activities we take for granted,” Brock said.
“Our teams can now proactively let bankrupt customers know that we’re not going to close their transactional accounts or take their debit cards away.”
The policy revision has received positive feedback from both customers and financial mentors, underscoring the importance of supporting people facing financial difficulties.
“We’re really clear that we want to exit the debt, not the customer,” Brock said.
Read the Westpac NZ Access to Banking in Aotearoa Report
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