1
00:00:00,040 --> 00:00:01,840
Speaker 1: Now, if you've been looking at the huge profits the

2
00:00:01,840 --> 00:00:04,000
Speaker 1: big banks Westpac and A and Z have been reporting

3
00:00:04,040 --> 00:00:06,359
Speaker 1: in the last couple of weeks and you've had raised eyebrows,

4
00:00:06,760 --> 00:00:08,840
Speaker 1: you may be pleased to know the Government has agreed

5
00:00:08,880 --> 00:00:12,760
Speaker 1: to act on all nineteen recommendations from Parliament's recent banking inquiry.

6
00:00:13,039 --> 00:00:15,319
Speaker 1: But you may be disappointed to know it's all pretty

7
00:00:15,320 --> 00:00:18,960
Speaker 1: low level stuff. Ken Dustin from the Banking Reform Coalition

8
00:00:19,040 --> 00:00:22,040
Speaker 1: is with us high Kent Evening Heather, it's is actually

9
00:00:22,079 --> 00:00:22,920
Speaker 1: going to make a difference.

10
00:00:24,079 --> 00:00:27,560
Speaker 2: Well, look, these aren't bad recommendations. In full marks to

11
00:00:27,600 --> 00:00:29,840
Speaker 2: the Government for adopting everything that's come out of the

12
00:00:29,840 --> 00:00:31,960
Speaker 2: Select Committee. I mean it's a good step, right, it's

13
00:00:32,000 --> 00:00:34,400
Speaker 2: not going to hurt. But you know, as you said

14
00:00:34,440 --> 00:00:37,000
Speaker 2: in your intro, I think the big issue here is

15
00:00:37,040 --> 00:00:40,720
Speaker 2: that the banks simply don't care whatever Parliament says. You know,

16
00:00:41,159 --> 00:00:44,720
Speaker 2: we've got we're on the back of an inquiry from

17
00:00:44,760 --> 00:00:48,520
Speaker 2: the Commerce Commission, another inquiry from Parliament from the Select Committee,

18
00:00:48,680 --> 00:00:52,200
Speaker 2: and you hear is Westpac cranking its profits up thirteen

19
00:00:52,240 --> 00:00:54,760
Speaker 2: percent and A and Z cranking them up a full

20
00:00:54,800 --> 00:00:58,120
Speaker 2: twenty one percent. So whatever it is that Parliament's saying,

21
00:00:58,160 --> 00:00:59,600
Speaker 2: I mean, clearly their banks aren't listening.

22
00:01:00,120 --> 00:01:04,040
Speaker 1: Now is there What of the recommendations which do you

23
00:01:04,120 --> 00:01:07,200
Speaker 1: think may be the most effective in doing something here?

24
00:01:08,560 --> 00:01:10,560
Speaker 2: Well, as I said, none of them are bad, but

25
00:01:11,240 --> 00:01:14,559
Speaker 2: what they're going to need to be effective is legislative teeth.

26
00:01:14,880 --> 00:01:16,959
Speaker 2: So the thing that we're really keen on is the

27
00:01:17,040 --> 00:01:19,399
Speaker 2: changes that they're making to payments in Z and in

28
00:01:19,480 --> 00:01:22,280
Speaker 2: payments in Z really is the gateway to open banking.

29
00:01:22,640 --> 00:01:25,000
Speaker 2: It's the reason that we don't have, for instance, real

30
00:01:25,040 --> 00:01:28,840
Speaker 2: time transactions moving between banks and New Zealand the same

31
00:01:28,880 --> 00:01:32,319
Speaker 2: way that practically every other civilized country in the OECD does.

32
00:01:32,880 --> 00:01:36,200
Speaker 2: And so the recommendation is that well, payments in Z

33
00:01:36,360 --> 00:01:38,880
Speaker 2: needs to reform its governance. It's not a bad step,

34
00:01:39,319 --> 00:01:41,720
Speaker 2: but fundamentally that's going to have to get backed up

35
00:01:41,720 --> 00:01:45,039
Speaker 2: with legislation, and probably sooner rather than later. And that

36
00:01:45,200 --> 00:01:49,200
Speaker 2: means taking the power to block open banking off the

37
00:01:49,240 --> 00:01:52,600
Speaker 2: banks in legislating for it, exactly the same way as

38
00:01:52,600 --> 00:01:55,280
Speaker 2: we legislated for the breakup of Telecom New Zealand ten

39
00:01:55,360 --> 00:01:55,760
Speaker 2: years ago.

40
00:01:55,800 --> 00:01:57,360
Speaker 1: I think that open banking is that much of a

41
00:01:57,400 --> 00:01:59,680
Speaker 1: game changer, because last I saw in Australia and to

42
00:01:59,680 --> 00:02:01,120
Speaker 1: be fair, it's been a while now, but last I

43
00:02:01,120 --> 00:02:03,320
Speaker 1: saw in Australia it really hasn't changed the game much.

44
00:02:04,680 --> 00:02:08,080
Speaker 2: Well, the big issue is competition, or the complete lack thereof.

45
00:02:08,400 --> 00:02:11,280
Speaker 2: You know, we've got the major four banks, you know,

46
00:02:11,360 --> 00:02:13,640
Speaker 2: depending on which market you look at, round about ninety

47
00:02:13,639 --> 00:02:16,239
Speaker 2: percent market share, and the only way we can change

48
00:02:16,240 --> 00:02:19,840
Speaker 2: that is by getting new banks in. And by new banks,

49
00:02:19,840 --> 00:02:22,880
Speaker 2: we don't mean those old traditional high street banks. What

50
00:02:22,919 --> 00:02:25,639
Speaker 2: we mean are these nimble FinTechs who can start offering

51
00:02:25,639 --> 00:02:28,320
Speaker 2: those kind of products. But without open banking, it's all

52
00:02:28,360 --> 00:02:28,959
Speaker 2: dead in the water.

53
00:02:29,200 --> 00:02:31,200
Speaker 1: Yeah, okay, so how much of a game changer is

54
00:02:31,240 --> 00:02:31,840
Speaker 1: open banking?

55
00:02:32,960 --> 00:02:35,840
Speaker 2: Open banking can be a huge game changer, and there

56
00:02:35,840 --> 00:02:38,720
Speaker 2: are some really nimble FinTechs out there who are poised

57
00:02:38,760 --> 00:02:42,320
Speaker 2: to do things. But as it stands, without legislation, without

58
00:02:42,600 --> 00:02:45,200
Speaker 2: Parliament saying yeah, we want this thing, we want to

59
00:02:45,200 --> 00:02:47,120
Speaker 2: get going on it really quickly, and we want to

60
00:02:47,120 --> 00:02:50,600
Speaker 2: put some hard deadlines for the banks to step up,

61
00:02:50,720 --> 00:02:53,040
Speaker 2: then really, you know, we'll still be having this conversation

62
00:02:53,120 --> 00:02:53,800
Speaker 2: in five years time.

63
00:02:53,880 --> 00:02:55,880
Speaker 1: Okay, So if what I'm feeling right now is disappointment,

64
00:02:55,919 --> 00:02:57,440
Speaker 1: that would be that would be a fair reaction.

65
00:02:58,639 --> 00:03:00,880
Speaker 2: I think just about everybody New Zealand is going to

66
00:03:00,880 --> 00:03:03,919
Speaker 2: be disappointed in the sense that they're looking at the

67
00:03:03,960 --> 00:03:06,640
Speaker 2: amount of money that's being taken offshore by the Australian

68
00:03:06,680 --> 00:03:09,400
Speaker 2: owned banks in the middle of the deepest procession we've

69
00:03:09,400 --> 00:03:12,440
Speaker 2: had in the generation, and thinking what you know. In

70
00:03:12,480 --> 00:03:15,200
Speaker 2: A and Z's case, profits up twenty one percent, But

71
00:03:15,200 --> 00:03:17,800
Speaker 2: they didn't get there by being twenty one percent better

72
00:03:17,840 --> 00:03:20,120
Speaker 2: at what they do, or twenty one percent more customers,

73
00:03:20,160 --> 00:03:23,080
Speaker 2: or twenty one percent more innovative. They've simply stuck their

74
00:03:23,080 --> 00:03:25,679
Speaker 2: hands in New Zealander's pockets longer and deeper than the

75
00:03:25,760 --> 00:03:28,440
Speaker 2: year before. And I think everyone in New Zealand would

76
00:03:28,440 --> 00:03:31,000
Speaker 2: be looking at and saying, when is this going to end?

77
00:03:31,080 --> 00:03:34,120
Speaker 1: Okay, Ken, if you could do one thing to fix banking,

78
00:03:34,240 --> 00:03:34,880
Speaker 1: what would it be.

79
00:03:36,320 --> 00:03:38,720
Speaker 2: I'd break up A in Z. To be perfectly honest,

80
00:03:39,200 --> 00:03:43,840
Speaker 2: we've gotat legislative exactly the same way as we separated.

81
00:03:45,120 --> 00:03:46,600
Speaker 1: Did you divide out from what?

82
00:03:47,800 --> 00:03:49,720
Speaker 2: Well, We'd simply say that no bank can be more

83
00:03:49,760 --> 00:03:52,640
Speaker 2: than ten percent of the market and break it up

84
00:03:52,680 --> 00:03:55,760
Speaker 2: into its bits and allow those pieces to be invested in,

85
00:03:56,000 --> 00:03:58,480
Speaker 2: preferably by New Zealander. So that the profits stay on

86
00:03:58,640 --> 00:04:03,280
Speaker 2: shore rather than going offshore. And instead of having two

87
00:04:03,360 --> 00:04:07,200
Speaker 2: large banks, we could end up with maybe seven or

88
00:04:07,240 --> 00:04:10,520
Speaker 2: eight or nine much smaller banks who would genuinely, genuinely

89
00:04:10,520 --> 00:04:11,400
Speaker 2: compete with one another.

90
00:04:12,000 --> 00:04:13,480
Speaker 1: When you say that this is a good idea, have

91
00:04:13,560 --> 00:04:17,479
Speaker 1: you weighed up the shock that it would create for investors.

92
00:04:19,279 --> 00:04:21,880
Speaker 2: Hither, You're entirely right. It would be a shock for investors.

93
00:04:22,160 --> 00:04:23,520
Speaker 2: But here's the thing, it will be a shot for

94
00:04:23,600 --> 00:04:26,760
Speaker 2: overseas investors because at the moment too much of our

95
00:04:26,800 --> 00:04:30,000
Speaker 2: banking industries is owned by the Australians. What we need

96
00:04:30,040 --> 00:04:32,440
Speaker 2: is to bring that investment back on shore. We have

97
00:04:33,120 --> 00:04:36,000
Speaker 2: the key. We saver funds, for instance, are dying to

98
00:04:36,080 --> 00:04:39,440
Speaker 2: invest in high quality. Yes, it's like the banks, but

99
00:04:39,560 --> 00:04:41,640
Speaker 2: because of the structure of our sector, they're pretty much

100
00:04:41,680 --> 00:04:44,479
Speaker 2: locked out of it. So New Zealanders could be the

101
00:04:44,480 --> 00:04:47,240
Speaker 2: ones benefiting from our banking sector rather than all the

102
00:04:47,240 --> 00:04:48,280
Speaker 2: money going to Australia.

103
00:04:48,600 --> 00:04:50,520
Speaker 1: Hey, thank you very much. Ken does always appreciate it.

104
00:04:50,600 --> 00:04:53,720
Speaker 1: Kent Dustin, who is from the Banking Reform Coalition.

105
00:04:54,400 --> 00:04:57,599
Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

106
00:04:57,680 --> 00:05:00,679
Speaker 2: news talks. It'd be from four pm weekday, or follow

107
00:05:00,720 --> 00:05:02,480
Speaker 2: the podcast on iHeartRadio