RBNZ Aims to Modernize Payments System and Future-Proof Banking

RBNZ Assistant Governor Angus McGregor spoke at the Financial Services Council conference in Auckland on Thursday morning. He discussed the Reserve Bank's efforts to modernize New Zealand's payments system and its work on the future of banking.

The Reserve Bank is planning to publish an issues paper later this month that will make the case for changes to New Zealand's payments system. The changes are aimed at making the system more efficient, innovative, and resilient. McGregor stated that the current retail payments system in NZ is reliable but needs evolution to meet modern economy expectations.

McGregor also discussed the RBNZ's work on the future of banking. He said that the Reserve Bank wants to understand what the world will look like in 2035 and how the banking sector might change. McGregor stated that thinking ahead is essential for regulators to support innovation and protect New Zealand's interests.

The RBNZ has been looking into introducing a prudential levy on banks, non-bank deposit takers, insurers, and financial market infrastructure providers (FMIs). The levy would help cover the cost of services provided by the Reserve Bank. McGregor stated that the levy is not meant to change how the Reserve Bank operates but rather shift the funding burden from the self-funded RBNZ revenue to those parts of industry that benefit from regulation.

McGregor emphasized that the Reserve Bank does not want to get in the way of innovation or new entrants coming into the market. He stated that the Reserve Bank is genuinely open for business and wants to see new entrants and innovation, but also ensure that they meet the requirements of the framework.