CoFR Seeking Feedback On Access To Basic Transaction Accounts
A basic transaction account should be available to anyone, irrespective of their circumstances, financial position or capability with technology, according to the Council of Financial Regulators (CoFR).
CoFR, which includes the Reserve Bank of New Zealand, the Financial Markets Authority, the Commerce Commission, the Treasury and the Ministry of Business, Innovation and Employment, has released a joint Issues Paper on Access to Basic Transaction Accounts.
Following the release of the Issues Paper, a public consultation is now open. CoFR is seeking feedback on the proposed introduction of basic transaction accounts to better support customer groups that are currently excluded. The consultation will remain open for eight weeks and will close on 18 June 2025.
'Having a transaction account means people can safely receive, store, spend and save money. Transaction accounts are a vital foundation for people to take part in the modern economy,' says Governor of the Reserve Bank of New Zealand, Christian Hawkesby.
Basic transaction accounts are different from bank accounts that are currently on offer, as they have additional controls in place (such as transaction limits) that make them unsuitable for money laundering and the financing of terrorism. These additional controls make basic transaction accounts a low-risk product, allowing simplified onboarding.
This means that basic transaction accounts can provide people with access to banking services who might otherwise be turned away, such as an older person whose driver's licence may have expired, someone who has recently been released from prison, or a young person who may not have a passport yet.
The Issues Paper highlights different options that have been taken to introduce minimum standards for basic transaction accounts in other countries.
FMA Chief Executive Samantha Barrass says, 'In order for the financial system to work for people in New Zealand, they need to be able to readily access basic banking services if they need them.'
'Overseas in places such as the UK, basic transaction accounts can be a lifeline for people to receive an income or make payments, and we want to see them available here,' she says.
Mr Hawkesby says, 'We see the benefits that basic transaction accounts could have for some New Zealanders and broader society, particularly for customers who may be in challenging circumstances and struggle to meet traditional onboarding requirements, such as providing ID.'
Westpac NZ recently launched a pilot basic bank account with the objective of improving access to banking services. Westpac NZ's new basic bank account will be a transactional bank account with simplified onboarding processes to support people who currently struggle to meet legal identification requirements.
'Our final market study report into personal banking services recommended that the sector works together to make basic bank accounts widely available. It's encouraging to see the issues paper published today and we encourage all stakeholders to have their say over the course of the next eight weeks,' Dr John Small, Chair of the Commerce Commission, says.
More information
Read the joint Issues Paper on Access to Basic Transaction Accounts (https://consultations.rbnz.govt.nz/financial-inclusion/access-to-basic-transaction-accounts/?_gl=1*12s5ub*_ga*MTk4ODU3MDg4OC4xNzI0ODc4ODIw*_ga_51JCWD9FGD*MTc0NTM1NzYxNi4xLjEuMTc0NTM1OTY4Ni4wLjAuMA..&utm_source=Reserve+Bank+of+New+Zealand&utm_campaign=17eaec141d-CoFR+Basic+transaction+accounts&utm_medium=email&utm_term=0_-52131e54df-25504821)
This Issues Paper builds on Recommendation 14 from the Commerce Commission Market Study into personal banking services, for the banking industry to collaborate to make basic transaction accounts widely available.
Consultation materials can be found on the Consultation Page on the RBNZ website. Consultation is open until 18 June 2025.
What is CoFR? CoFR represents five agencies: The Reserve Bank of New Zealand, the Financial Markets Authority, the Commerce Commission, the Treasury and the Ministry of Business, Innovation and Employment. Financial inclusion is one of five priorities for CoFR. The CoFR Financial Inclusion Community also includes Te Ara Ahunga Ora The Retirement Commission and the Ministry for Social Development as observer agencies. View this site's section on financial inclusion for more information.
What is financial inclusion? - 'When individuals and businesses have access to useful and affordable financial products and services that meet their needs -transactions, payments, savings, credit and insurance - delivered in a responsible and sustainable way.' This definition comes from the World Bank.
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