Bank details its 'customer first' policy going forward
The lending landscape has shifted significantly over 2018, with both mainstream and non-bank lenders looking at significant changes to fees and sales practices in the coming year.
Westpac NZ recently announced its end of year results, where it reaffirmed its focus on putting customer outcomes first. The bank has removed or reduced 13 fees over the course of the year, and recently followed ANZ and IAG in removing sales targets for frontline sales staff – a move likely to be followed by the majority of New Zealand’s lenders.
According to Liz Cannon, head of market segments and third party channels, changes to fees, commission structures and mortgage adviser processes have been key developments for the bank over the last year.
“We made changes to our upfront commission structure with effect 1 July 2018, replacing the quarterly discretionary portion with an increased upfront commission,” Cannon told NZ Adviser.
“At the same time, changes were also made to our clawback structure, and additional processes and controls were rolled out to mortgage advisers during the year to ensure that our obligations under the Responsible Lending Code continue to be met.
“Around 40% of our home loans are currently originated through mortgage advisers, so this channel remains an important part of our distribution.”
Commenting on the year ahead, Westpac says the ongoing conduct and culture review will remain a key area of focus for the banking sector as it works to take action following the recent report. The FMA and RBNZ have stated that some of the concerns identified require “immediate remediation”, and will be requesting an update from New Zealand banks in March 2019.
“We welcome the FMA and RBNZ report and will be looking at how we can implement all of its recommendations,” Westpac stated. “We’re pleased the regulators have not found systemic issues in New Zealand banks, but they’ve identified many areas that could be improved and we’re absolutely committed to taking quick action to fix that.
“We commend the regulators on their thorough report and look forward to receiving our individual report later in November.”
