Industry drives change, not regulators
The Future of Financial Services, New Zealand event in Auckland showcased the country’s unique approach to financial services innovation.
Sandstone Technology chief customer officer Jennifer Harris and chief product officer Michelle Yu (pictured above, left to right) reported key observations from the event.
The conference's overarching theme was “Repositioning New Zealand as a Hub of Innovation.”
Discussions covered productivity strategies, cost reduction, and ROI, with a focus on financial fraud, cloud delivery in digital banking, and customer-centric digital transformations.
AI and its impact
Generative AI in cloud-native services sparked conversations on operational risk and compliance.
“We see the larger FIs building out their LLMs; meanwhile, the smaller FIs are still watching their larger competitors to see how they’re using AI successfully,” Harris and Yu said.
Despite AI advancements, human oversight remains essential to ensure data integrity.
Industry-led open banking
New Zealand’s open banking framework is led by the financial services industry rather than the government.
“The benefit of having the industry lead these initiatives is everyone gets a voice at the table,” Harris and Yu said.
The collaborative approach contrasts with the more regulatory-driven frameworks in Australia and the UK, fostering greater buy-in and progress, they said.
Focus on ESG
Environmental, social, and governance (ESG) initiatives are gaining traction among NZ financial institutions.
“Forward-thinking organisations are fully embedding ESG in their corporate culture and business practices,” Harris and Yu said.
Some banks have stopped non-essential flying to reduce their carbon footprint, while others promote green loans.
Automation and core transformation
Despite innovation strides, manual processes remain prevalent in NZ banking compared to Australia and the UK.
“There’s a massive opportunity for the New Zealand market to take advantage of digital banking and lending origination technology to help drive growth,” Harris and Yu said.
Partnerships for innovation
Partnerships are seen as crucial for achieving quick returns on investment and value.
“There’s a growing acceptance that no bank can be everything to everyone,” Harris and Yu said.
Partnering with tech companies for specialized functionalities is becoming the norm to maintain innovation momentum.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
