(Bloomberg) -- New Zealand’s banking landscape faces significant changes as new players target different segments, potentially disrupting the big-four lenders who currently dominate, according to ASB Bank.
“I don’t think the future of banking in this country, certainly from what we see overseas, is full-scale banks,” ASB Chief Executive Officer Vittoria Short told a parliamentary committee Wednesday in Wellington. “Every part of the competitive landscape that I look across has got a very different set of competitors. That’s fundamentally changing the landscape of competition in this country.”
Short was arguing against the view that banking is a cosy oligopoly of four, Australian-owned lenders who make excessive profits at the expense of struggling homeowners and farmers. ASB is one of that group and was appearing before the committee as part of an inquiry into banking competition.
Different players are emerging in different parts of the market, Short said, noting that Dutch lender Rabobank is active in rural, while government-owned Kiwibank is growing in consumer lending.
“They’re not small, they are material,” she said. “Rabobank is material in rural. Kiwibank has over a million customers. That’s not small and they’re growing a lot of market share.”
New Competition
Elsewhere in the industry, banks are facing new competitors, Short said.
“If you think about credit cards, you’ve got buy-now-pay-later. If you go to payments, you’ve got Apple,” she said. “And the biggest of all is yet to come and that is the big tech.”
ASB Chair Therese Walsh told the committee the challenge is the new entrants may only target a profit pool they perceive as favorable. They may not deliver full services and they may not fully participate in New Zealand by paying taxes or employing people.
“The market’s fragmenting and there’s intense competition everywhere in different ways and in different parts,” she said. “But we are concerned that the way we are going it’s going to be really difficult if we don’t create an even playing field.”
©2024 Bloomberg L.P.
