New Zealand's banks do not rip off their customers like their Australian counterparts had been doing, the Bankers' Association says.
Photo: Creative Commons / Pixabay / 3dman_eu
Bankers' Association chair David McLean, who is also chief executive of Westpac New Zealand, said a royal commission of banks similar to that in Australia was not a necessary form of action for New Zealand.
While Westpac is Australian-owned and has business practices similar to their Tasman counterparts, Mr McLean told Morning Report local banks had a different commercial culture and behaved differently than their Australian owners.
"We are embedded in the local communities in New Zealand" - Bankers Association chair David McLean
He was responding after a royal commission into Australia's financial services sector found banks have cheated customers and lied to regulators.
The Financial Markets Authority and the Reserve Bank met with the main banks on Monday and ordered them to prove they were behaving ethically and honestly.
"In New Zealand we have very effective regulators, and they've asked banks to provide them evidence that there's no problem and we're very willing to do that," Mr McLean said.
"The Reserve Bank requires that we have a majority of independent directors who are New Zealand residents on the board and that they're answerable to the operations in New Zealand," Mr McLean said.
"We are staffed by Kiwis and we operate in a way which complies with New Zealand laws which are very different."
Mr McLean said there was no evidence of any systemic misbehaviour in New Zealand.
Consumer NZ chief executive Sue Chetwin said a recent survey had found customers were more satisfied with New Zealand banks than the Australian-owned giants, but an inquiry would help hold the banks responsible.
Consumer's chief executive Sue Chetwin. Photo: Consumer
"We've just done a recent survey and the NZ banks have come out very well. Australian-owned banks, which are the big banks, have come out less well," Ms Chetwin said.
"Is the bank actually taking their circumstances into account?" - Consumer NZ chief executive Sue Chetwin
She said fee charges, transparency issues, responsible-lending obligations and unsolicited offers by banks were areas of concern.
"Among the complaints is people getting services or products they haven't asked for or that don't suit them," she said.
However, First Union national organiser Stephen Parry said this concern was not new, but bank employees face pressure and risk losing their positions if they fail to meet targets.
"Ultimately, the biggest fear is that if you fail to meet your targets over a certain period of time, there's a very real possibility that you will get managed down the job," he said.
"We've been raising for several years the issue of sales targets and sales pressure within the bank and I think it's fair to say it's the single biggest complaint we get from our membership.
"Simply put, our members don't feel comfortable being incentivised and pressured to sell products which customers don't necessarily need nor want."
Mr Parry said some of the recommendations from a report commissioned by the Bankers' Association in Australia had to a degree were already being adopted in New Zealand.