Launching a bespoke pilot programme for financial technology companies will help boost competition for Kiwi consumers and improve choice in the financial and banking sectors.
“The Government is relentlessly focused on improving competition so we can lift productivity and improve outcomes for Kiwis,” said Commerce and Consumer Affairs Minister Andrew Bayly.
“Financial technology companies – or fintechs – offer huge potential for Kiwis. Fintechs compete with traditional banks by providing customers with choices about managing money, making investments, transferring payments and doing business.”
He said fintech also drove innovation and was the kind of skilled, high-value, high-wage company the government wanted to see thrive in New Zealand.
Entrepreneurial Kiwis have already developed several world-leading fintech companies, but they must multiply that success several times.
“Our ambition is not to have one or two unicorns but a scalable fintech industry that employs Kiwis and exports products and services around the world. However, fintechs often cite cumbersome regulations as a barrier.”
Bayly said they have listened to this feedback, and the Financial Markets Authority (FMA) and FinTech NZ have partnered to develop a testing ground where fintechs can experiment in a controlled environment before launching a full commercial.
These environments, known as ‘regulatory sandboxes,’ help businesses tweak products to comply with regulations before launch.
The regulatory sandbox will enable fintech to save time, reduce costs, and ensure greater consumer protection. It will also help the FMA identify unnecessary red tape that poses an industry-wide barrier.
“The regulatory sandbox pilot offers an exciting opportunity for the Government to work with industry to support the growth of a sophisticated, world-leading fintech industry. In time, such an industry would mean more choices, better services, and greater financial freedom for hardworking Kiwis.”
For several years, overseas regulators have used similar sandboxes to help firms develop their products and grow the financial technology industry.
The pilot will run from January to July 2025. Following the pilot, the FMA will decide whether to create the programme permanently.
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