About FinTech
Combining the words ‘financial’ and ‘technology’, FinTech refers to technology-enabled financial innovation, which is changing the way financial institutions provide – and consumers and businesses use – financial services.
As in many industries, technological innovations are one of the main drivers of change across financial services and present many opportunities for businesses, regulators and consumers alike.
However, with opportunity comes risk. We recognise the need for regulation that:
- supports dynamic products and services and welcomes new technologies
- manages and minimises the risks and impacts on consumers, businesses, and financial stability.
Why we are interested in FinTech
We want to explore how FinTech developments could help us achieve our mandate — promoting a sound, efficient and dynamic monetary and financial system, and enabling the economic wellbeing of all New Zealanders.
We are concerned about new risks to financial stability and that FinTech initiatives may unintentionally exclude some people's access to financial products and services.
FinTech opportunities
We can see FinTech opportunities in the following areas:
- increasing financial inclusion and financial literacy in New Zealand
- providing financial services to consumers and small businesses at lower cost
- driving competition and enhancing existing offerings
- making the financial system more efficient, effective and resilient
- enabling us to perform our operational and regulatory roles more efficiently and effectively
- offering new perspectives on existing challenges as we seek to manage a modern and evolving financial system.
Our FinTech work
We want our regulatory settings to support innovation and industry-based solutions in financial services.
We are keen to ensure we and the regulatory frameworks we operate do not prevent digital innovations in financial services from thriving in New Zealand.
We have been working with other agencies in the Council of Financial Regulators to develop a 1-stop advisory service for FinTech businesses (https://fintech.govt.nz/). This is intended to provide information on regulatory requirements, which is useful to fintech businesses when developing new products and services.
Over time, these developments may suggest that we need to make changes to our supervisory approach and the types of entities or activities we regulate.
Our current focus
FinTech affects a number of our work streams. The major projects which are currently exploring FinTech opportunities are as follows.
Future of Cash — Te Moni Anamata
Cash allows access to the financial system for those who are digitally excluded or face other barriers to making electronic payments. It also provides a back-up means of payment in cases of personal emergency or system outages.
We are particularly interested in hearing from individuals and businesses with innovations that can enable financial inclusion or that are considering innovative solutions for personal finance.
Read more about the Future of Money — Te Moni Anamata
Pacific Remittances Project
We work closely with our Pacific neighbours and recognise the economies of many Pacific nations rely on remittances. However, the cost of sending remittances to the Pacific are among the highest in the world.
In partnership with agencies in New Zealand and overseas, we are exploring what could be done to make sending remittances to the Pacific easier and cheaper.
We are also interested in supporting longer-term sustainable improvements for the payments infrastructure in the region.
Read more about our Pacific Remittances Project
Engaging with stakeholders
We work with other agencies in the Council of Financial Regulators (CoFR) to ensure a ‘one voice’ approach and to create a clear and consistent regulatory pathway so businesses can navigate New Zealand’s regulatory landscape with confidence.
CoFR agencies and the Department of Internal Affairs have established a single point of regulatory support and information for the fintech sector.
Removing barriers to innovation
While we believe the current regulatory system is flexible enough to allow innovative approaches to develop, we will continue to work closely with our stakeholders to identify and remove any unnecessary barriers that prevent new businesses from entering the financial system or existing ones from developing FinTech solutions.
Our FinTech research
Currently, we have prioritised three research topics relating to FinTech:
Regtech and Suptech
This topic involves us learning about technology that can:
- increase our ability to perform our operational and regulatory roles
- make it cheaper and easier for financial services to comply with and implement the regulations.
This includes:
- technology that can improve understanding of the financial environment
- technology that can manage a wider and more complex range of risk
- data visualisation tools that can present supervisory data in more user friendly ways.
Analytics
We want to know more about the range of tools that will enable us to analyse regulatory returns and data more efficiently and with more insight. This includes understanding the large volumes of unstructured data we receive. This data is often difficult to access and analyse.
Digital currencies
We have an ongoing interest in developments in central bank digital currencies including research and current projects by our international peers.
Related research and speeches
- The Future of Cash Use – Te Whakamahinga Moni Anamata
- Fintech developments and implications for RBNZ regulatory responsibilities (Financial Stability Report, November 2017)
- An open mind on open banking (Financial Stability Report, May 2018)
- Decrypting the role of distributed ledger technology in payments processes (Bulletin, May 2018)
- The pros and cons of issuing a central bank digital currency (Bulletin, June 2018)
- Fintech developments in banking, insurance and FMIs (Bulletin, November 2018)
- The Fintech Opportunity in Personal Finance — speech by Simone Robbers, Assistant Governor and General Manager Governance, Strategy and Corporate Relations (Singapore, November 2019)
Get in touch
If you want to find out more or get in touch please contact us at [email protected].
If you are a business, please provide basic information about your product or service, and about your business in New Zealand. We aim to help businesses understand our regulatory regime and the challenges they may face when developing an innovative product or business model.