Bank accounts should be for everyone

Newsroom

21-04-2025

It's billed as the passport to the economy, but a cross-section of New Zealand's population can't access one.
It's the humble bank account, a rite of passage for most Kiwis, but for prisoners, refugees, and the homeless, among other vulnerable marginalised people, it's in the too-hard basket.
So, in a bid to improve access to banking services, Westpac NZ is now trialling a new 'basic' bank account, designed as a transactional bank account with simplified functionality.
'It's for vulnerable or marginalised customers who may need additional support to open an account, such as those who do not meet legal ID requirements, or who may be in vulnerable circumstances and require additional restrictions on their account,' Westpac's Manager of Customer Vulnerability and Financial Inclusion, Louisa Brock, tells The Detail.
'A bank account is like a passport to the economy. Without one, you struggle to receive benefit payments or income, you can't pay bills … a bank account is essential for day-to-day living. It's just fundamental for someone to be successfully a part of society.
'But this is just not the case for vulnerable or marginalised customers, and this can leave them feeling excluded. We want to change that.'
Westpac has consulted with the Reserve Bank and the banking industry to develop the pilot, and will work alongside groups including City Mission, Fincap, Department of Corrections and Oranga Tamariki.
The bank will work with about 20 to 30 clients during the trial; sign-up requirements will be tailored to individual needs.
The account will have no minimum savings requirement and no bank fees.
Currently, to sign up for a standard bank account, potential clients need proof of ID, including a valid passport, driver's licence, or national identity card. Proof of address, dated within the past 12 months, is also required.
'We need to know who our customers are, and to fulfil anti-money laundering and regulatory requirements,' Brock says.
'When this [the anti-money laundering regime] was set up, it wasn't to exclude vulnerable people, I think they were just overlooked through this process … because for people who are in vulnerable situations, the requirements can be difficult to fulfil.
'We need to be flexible with our customers, so that we help to onboard them.'
Westpac also works with the Department of Corrections to provide bank accounts for newly released prisoners to help them reintegrate into society, with nearly 500 accounts opened through this programme.
Victoria University senior lecturer Victoria Stace has studied the financial situation of past and present prisoners and authored two reports – Paying the Price and Steps to Freedom – and welcomes the new basic bank account trial.
'The basic transactional account is a fantastic initiative,' Stace tells The Detail. 'It's not something we are a world leader on, because other countries have these things.
'But it's wonderful to recognise that this is a way of achieving financial inclusion for people who would otherwise struggle to meet the usual anti-money laundering requirements that are necessary to open a bank account.
'It's super important for prisoners, because it not only gives them access to financial inclusion and financial services, but it also is a key part of assisting them to reintegrate into society.'
She says when prisoners are released, it can be overwhelming for them to walk into a bank and set up an account.
They then have no access to money and get desperate, prompting some to reoffend.
Others will opt to use a friend's account, but this can prove problematic, as the money can be (and has been) stolen.
'This new account will certainly address some of the problems,' says Stace. 'It's an incredibly helpful step.
'But ideally, this account should be set up by the time they leave prison.'
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