What we learned from big bank bosses talking at Parliament’s competition hearings
Thursday, 19 February 2026
MPs and the Commerce Commission can chalk up a few wins in their battle to see greater competition in the banking market, Parliament’s banking inquiry has heard.
Parliament’s Finance and Expenditure select committee has been questioning bank chief executives as they seek to understand whether moves to create greater competition in the banking sector are working.
It summoned the chief executives of Kiwibank, ANZ and ASB to appear on Wednesday. Westpac’s Catherine McGrath gave evidence last week.
The bank bosses’ answers appeared to show some competition wins, with claims competition was “intensifying”.
That rosy picture was, however, somewhat tempered by claims from the Commerce Commission, and some small fintechs, about slow progress towards “open banking”, which they believe holds the potential for getting the public better-value banking services.
ASB’s Vittoria Short
She conceded that the recommendations from the Parliamentary inquiry a year ago “provided a way forward to a more competitive market”.
It was a notable statement because the banks have consistently insisted banking is intensely competitive.
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In her written submission, she said competition had been intensifying, which would appear to indicate that Parliamentary scrutiny had been having an impact with its work.
Shortt referenced the improved bank switching service launched by the banks, which had seen record levels of bank switching in December.
Small banks has scored a major win with the Reserve Bank having eased their capital requirements, she said.
She resisted the idea of banks being forced to report on the profitability of their transaction accounts, which MPs had come to see as a source of free funding for banks as they paid no interest on the billions of dollars households had in them.
Shortt said banks overseas did not have to do such reporting.
National’s Ryan Hamilton suggested ASB could be seen as “ducking for cover” on the issue.
Shortt said the bank had contacted 230,000 customers with significant amounts in transaction accounts in the past year to encourage them to see if there was a better way for them to be banking.
The bank had also launched a fee-free “basic” bank account, which was something the Commerce Commission had called for after its Retail Banking Market Study in 2024.
MPs had been keen to see fees for banking fall.
ANZ’s Antonia Watson
Watson said there had been “fierce competition lately” and felt the work done by MPs and the Commerce Commission, and also the Financial Markets Authority, had contributed to that.
“It shines a light on the industry, and I think that's helpful. It holds us to account. Competition makes us better,” she said.
The big banks have been criticised for sending so much in dividends to their Australian shareholders that they have not invested enough in their technology in New Zealand.
During the hearings, reference was made by Kiwibank chief executive Steve Jurkovich to one of the bank’s core banking systems now being 40 years old, but he did not name the bank.
Watson said ANZ was “neck-deep” in modernising its banking platforms, but admitted that several years ago, she had felt “slightly sick” about being approached by clever fintech companies because she knew how hard it would be to “plumb in with their great idea”.
Several competition wins were cited in ANZ’s written testimony.
Banks are now more actively supporting mortgage comparison tools and mortgage brokers, so people and their brokers, could shop around more easily for loans.
New Zealand lags behind Australia in having systems that allow mortgage advisers to seek loans for clients from all the banks with a single application.
ANZ also introduced a level playing field for mortgage brokers last year so they had access to the same incentives - such as cash contributions on new lending, and discounts on interest rates - that the bank could offer to borrowers who came to it direct.
It also cited some modest fee reductions on some of its accounts.
Kiwibank’s Steve Jurkovich
The bank had already enjoyed a significant win from the banking inquiry.
The banks, Kiwibank included, lobbied for changes to capital requirements from the Reserve Bank and got them late last year, potentially with more changes to come.
All wanted them softened, but the small banks stood to gain most as the old settings penalised them by judging them more risky because of their size.
“We're very positive about the changes. I think they reflect a long-held view that the playing field hadn't been level,” Jurkovich said.
As a result of the rule changes, Kiwibank now had about “either $20 billion of home loans we could do, or … circa $7 billion of business banking, or a mix of both”, he told MPs.
But in the spirit of banks turning the banking inquiry into a lobbying opportunity, Jurkovich said changes were now needed to the new deposit guarantee scheme to make it cheaper for smaller deposit-takers.
Another area MPs were keen to see improvement on was for banks to make more loans to iwi and hāpu to develop homes on collectively-owned Māori land.
All claimed to be making progress, including Jurkovich, though some of the complexity lay in the many owners of that land agreeing on what to do with it, and getting the right ownership arrangements in place.
But all also agreed more could be done.
Westpac’s Catherine McGrath
Catherine McGrath indicated New Zealand could increase the speed of payments, but was not convinced the country should go to real-time payments, as some other countries had done.
She said New Zealand banks processed payments every 30 minutes, but banks could speed that up to perhaps every 15 minutes.
She drew a link between real-time transactions being introduced, and fraud losses for customers rising.
ASB’s Shortt agreed with McGrath.
“Real time payments is real time frauds and scams,” Shortt said. “It’s impossible to get the money back when it’s gone.”
ANZ’s Watson felt similarly and, like McGrath, she was keen on using current payments infrastructure rather than building a new and costly system to enable real-bank payments.
Some real-time payments between businesses could be worth having, she said, as those businesses knew each other. She agreed with fintech start-up BlinkPay that that could be achieved using the current payments infrastructure.