Market study into personal banking services

The aim of a competition study (or market study) is to promote competition for the long-term benefit of consumers in New Zealand.

Competition drives businesses to innovate and be more efficient, and to offer New Zealanders greater value and more choice. It is an effective competitive process that ensures prices and profits are not too high for too long.

Consistent with the terms of reference for the study, we looked at a range of things, including:

• the industry structure and the nature of competition in personal banking
• the conditions of market entry and expansion, particularly any that may affect disruptive firms
• consumer behaviours and preferences
• the extent to which consumers change their personal banking service provider(s), how easy or difficult it is to do that currently and the tools available to help consumers make those decisions
• any impediments to new or innovative banking products or services, business models or disruptive firms (including fintech providers)
• indicators of bank financial performance (including profitability) and what, if anything, those indicators might suggest about the levels of competition in personal banking.

Our final competition report is the result of a detailed process of information gathering and engagement with a wide range of stakeholders, including providers of personal banking services, major banks and smaller banks, non-bank deposit takers, fintechs, domestic and overseas regulators of banking services, consumers, and Māori.

We thank all parties for the information they have provided and for their engagement throughout this study.

We published our final report on 20 August 2024.

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  Executive summary

• 

  Abridged version

• 

  Final report

We found that New Zealand’s four largest banks – ANZ, ASB, BNZ and Westpac – do not face strong competition and we made a suite of recommendations for improving competition, designed to work together to support new entry and expansion, reduce the regulatory barriers to competition and empower consumers to get better prices and services.

The reports and papers produced, public versions of submissions received throughout the study, and other material are available through the links below.

The available material includes:

• links to our draft report
• a summary of the themes from our wānanga with Māori stakeholders in October 2023
• a summary of our online workshop with FinTechNZ members in November 2023
• consumer research conducted on our behalf by Verian and published alongside our draft report
• econometric analysis on measures of efficiency (including cost and profit efficiency), economies of scale, market concentration and market power for New Zealand banks, undertaken by Professor Dimitris Margaritis and Dr Maryam Hasannasab of the University of Auckland
• the transcripts of the consultation conference sessions that we hosted in central Auckland and online in May 2024.

Media briefing live stream

We held a media briefing when we released our final report on Tuesday, 20 August at 8.30 am.