RBNZ Sees Digital Banking Revolution Coming to New Zealand

The Reserve Bank of New Zealand (RBNZ) has released a study on the future of banking in the country, predicting that it will become more digital, diverse, and interconnected by 2035. According to RBNZ Assistant Governor Angus McGregor, the banking environment is changing quickly, driven by forces such as geopolitical uncertainty, technological innovation, and shifting consumer expectations.

The report explores three plausible scenarios for the future of banking in New Zealand: 'better banking', where banks evolve incrementally; 'digital banking revolution', where fintechs and digital banks capture market share; and 'rise of platform banking', where the sector becomes a modular ecosystem powered by platforms and interconnected providers.

The report highlights both opportunities and challenges for the banking sector. On one hand, the shift towards digital banking could lead to greater choice, faster services, and increased innovation and efficiency. On the other hand, it also increases exposure to cyber risk and raises concerns about trust and confidence in the financial system.