People can make submissions on the focus areas for the Commerce Commission study of banking. Photo: RNZ / 123rf
The Commerce Commission's review of competition in personal banking will focus on bank deposit accounts and home loans.
Chairperson John Small said an initial review of research showed New Zealand banks had been more profitable than those in similar economies around the world over the past decade.
"This raises questions for us," Small said in the commission's preliminary issues paper.
"We want to understand whether lack of competition in personal banking is a contributing factor."
The commission has outlined the key products and issues it proposes to explore in the study of personal banking services.
"Deposit accounts and home loans are an important aspect of how banks compete for retail customers and are held by a large proportion of Kiwis," Small said.
"We will also consider other banking products to build a complete picture of competition between personal banking service providers."
The commission would look at bundled personal banking services, such as insurance, and the degree to which these might limit switching between banks.
"The study is looking at how the competitive process is working," Small said.
"If competition is working well in the sector, we'll see the benefit to Kiwi consumers through the quality and range of products available, fees, interest and charges and the services offered."
Other matters to be explored included the role of innovation, or lack of it, in promoting competition.
The commission is inviting submissions to help shape focus areas for the 14-month long study.
"There's been significant interest in this market study, and our thinking and conclusions will be guided by the feedback and evidence we receive over the coming weeks.
"We need to hear from the sector - the major banks and the small banks, as well as non-bank participants.
"We also know there are different experiences of personal banking services across communities and demographics and it's important that we hear from customers about those," Small said.