Westpac New Zealand chief executive Catherine McGrath says the inability to access a bank has serious and significant negative impacts. Photo: 123RF
A new study suggests legal and other barriers in the banking system are financially disenfranchising many thousands of New Zealanders.
A report commissioned by Westpac Bank looked at obstacles to opening a bank account, the impact of not being able to access a bank, and who is most affected.
There are no figures on how many New Zealanders are unable or found it difficult to get bank access, but using a World Bank formula it estimated it could be tens of thousands.
Westpac New Zealand chief executive Catherine McGrath said the inability to access a bank had serious and significant negative impacts, and generally affected people already on the margins.
"Having a bank account goes beyond the mechanics of getting paid, storing money and buying things. Actually, it's one of the basics you need for modern life."
The report identified the most affected groups were likely to be rough sleepers, youths without family support, prisoners coming out of jail, refugees and sex workers.
"The research shows not having a bank account has a profound impact - it makes it hard to pay for a place to live, keep a job and pay bills. It also leaves people open to exploitation and disconnected from their community."
Among the barriers identified were the lack of identification and proof of address as required by anti-money laundering rules, bankruptcy or insolvency which can debar people from having a bank account, financial and digital literacy, fear of judgement, anti-social behaviour, and location of bank branches.
McGrath said a more flexible approach to the problem was needed and required the participation of the banking sector, government agencies and community and social groups.
Westpac was working with Corrections on helping prisoners nearing release, young people under Oranga Tamariki supervision, groups working with domestic and family violence victims, putting out simplified 'how to bank' information, and improving access and treatment at its branches, she said.
"We've heard loud and clear that there is scope for the industry to make our branches more welcoming, our processes more understandable and accessible, and our appetite to [provide] bank [services to] some applicants more open-minded."
However, McGrath said she was comfortable with the size and scope of the Westpac branch network.