Fintech Urges Government Action to Lower Barriers for Digital Banks in New Zealand

In a bid to foster innovation and competition in New Zealand’s banking sector, fintech service Dosh has called upon the government to heed the recommendations of the Commerce Commission’s draft report on personal banking. Highlighting the staggering entry barriers hindering new digital bank startups, Dosh emphasized the urgent need for regulatory reform to level the playing field.

CEO and co-founder of Dosh, Shane Marsh, underscored the discrepancy in capital requirements between New Zealand and its international counterparts, labeling the Reserve Bank’s regulations as excessively stringent. While countries like Britain, Australia, and Singapore demand capital ranging from £1 million to A$15 million, New Zealand imposes a hefty $30 million requirement, potentially escalating to $40 million under the proposed Deposit Takers Act.

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Marsh lamented the dearth of startup banks in New Zealand over the past quarter-century, citing Kiwibank as a notable exception due to government funding. He emphasized the crucial role of reduced capital requirements, advocating for a more reasonable threshold of $5 million to $10 million to encourage new entrants and spur innovation in the market.

Moreover, Marsh highlighted New Zealand’s lag in adopting open banking practices, which empower consumers to share financial information and foster competition. He stressed the imperative for regulatory support and conducive environments to enable competitors to thrive, urging the government to take decisive action on the Commerce Commission’s recommendations.

To realize a more dynamic and consumer-centric banking landscape, Marsh called for swift government intervention within the next one to two years, foreseeing a transformative shift within five years. By embracing regulatory reforms and promoting competition, New Zealand stands poised to usher in a new era of banking characterized by greater choice and innovative services for consumers.

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