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Bankers Association agrees rules can be difficult

The Bankers Association agrees complying with state regulations can be difficult for staff working in the industry.

Wednesday, October 6th 2021, 7:58AM 4 Comments

by Eric Frykberg

The comments follow criticism of the scale of Government rules by the departing chief executive of SBS Bank, Shaun Drylie. 

He said banking staff had to spend a lot of time dealing with Government compliance when they could be improving their business with innovative products and services.

Drylie said many reforms to the finance sector had been positive, but many regulations had put huge internal pressure on banks and were displacing other productive work. 

In response, the Bankers Association issued a restrained statement, basically agreeing with Drylie.  

It said the Government often directed banks to do something by a set date, but did not tell them how it should done until late in the piece, which put huge presssure on everyone.   

Association chief executive Roger Beaumont defended regulation in principle.

He said quality regulation was in the best interests of consumers and banks, and banks took their compliance obligations very seriously.

But it was not all good news. 

“As an industry we sometimes find implementing deadlines can be challenging,” Beaumont said. 

“For example, the law sets a compliance date but the more detailed regulations or guidance are not available until close to the deadline.

“ That means we don’t have much time to make the required systems and process changes.”

And that was even before the pandemic. 

“Covid-19 has had a further impact on that kind of pressure, with people working from home and difficulties getting systems changed and preparing staff for the new requirements.”

The Bankers Association represents 18 banks, including the big four, as well as niche banks like SBS and several foreign banks licensed in New Zealand.

Tags: regulation SBS Shaun Drylie

« Retiring bank chief slams state regulationWhat the RBNZ said about increasing the OCR »

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Comments from our readers

On 6 October 2021 at 10:56 am w k said:
to bankers association - how come you are only agreeing it now? isn't it far too late?
more time spent on compliance can only mean higher costs. at the same time, there is a particular group who want cost to consumers to be reduced. i'm not sure how that can be achieved - a rolls royce for the price of a morris minor?
On 6 October 2021 at 4:47 pm resnter said:
Agree they may need to think things through or reconsider once advisers leave the industry for lack of enjoyment due to not being able to have the time to spend enough time with their clients giving quality advice over paper work. Now for mortgage advisers there are more questions EG do you foresee your expenses increases over the next 12 months or decreasing? Do you anticipate (other than retirement) any thing that may effect your ability to repay your loan payments... where does it stop.
With this carry on they may need to reopen banks and employ bank staff again as we are under paid for our efforts EG look at refixing a loan its an insult when you have business overheads. I may have to only do fee for service to survive.
Licencing it a way to push small guys out and get bigger flocks of sheep in one paddock to keep an eye on. Why on earth would the reserve bank while while we are at it restrict LVR to 10% of banks books and NO one seems to care about increasing First home loan caps! While I have time on my side, perhaps I will retrain as a psychiatrist as it looks like NZ will need more thanks to FMA and Reserve Bank and all your rules and regulations.
On 6 October 2021 at 11:11 pm w k said:
@resnter: may not be a bad idea. with this mental health thingy going on amongst advisers, who knows, a compulsory L5 certificate in mental health and stress management for advisers could be on the card.
btw, pushing the small guys out was exactly my thoughts.
On 6 October 2021 at 11:16 pm Amused said:
@ w k & resnter

Well said. And on the subject of mortgage advisers now being asked for their customers seeking a home loan "do you foresee your expenses over the next 12 months increasing" has anyone thought about the bank themselves encouraging the customer to take a new credit card, insurance product or superannuation scheme etc. after settlement thereby increasing the customers expenses from that which are being disclosed on the original home loan application? No??? Crickets chirping.....

What a ridiculous situation then whereby the banks now are basically asking mortgage advisers to essentially guarantee that a customers expenses won't change for 12 months following drawn down of a new home loan but that lender themselves might actually be the one who causes the customers to incur additional monthly expenses!

I think now that if mortgage advisers are being asked by the banks to state that a customers expenses won't change in 12 months' time we should also be asking the bank in question to promise in writing that they won't try and sell our customer any kind of product that will see their expenses increasing.

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