Claire Matthews: Massey University Banking Expert sceptical on Revolut starting up in New Zealand

Open banking firm ‘Revolut’ has applied to become a registered bank in New Zealand.

Revolut already offers a “one stop-shop" money management app here with payment, card and money management services.

It says with a banking license it could further offer things like credit cards, consumer loans and mortgages.  

Massey University Banking Expert Claire Matthews joins the show.

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Episode Transcript

Speaker 1 (00:00):
Now, if you are one of the people who firmly
believes that open banking is going to fix the whole
banking system, I've got some good news for you because
there's a firm called Revolute that has applied to become
a registered bank in New Zealand and open banking is
what they do. Massive university banking expert Clear Matthews is
with us. Now, Hey, Claire, Hi, Heather. Are they a
game changer?

Speaker 2 (00:21):
Well, it all depends where you sit on the open
banking issue. As you suggest, Potentially they are, but the
reality is they are already operating in New Zealand. All
the license would mean is that they would be operating
under slightly different regulations and would be able to use
the name bank, so they'd be able to describe themselves
as Resolute Bank and talk about what they do as banking,

(00:43):
which they can't do at the moment, despite the fact
that what they are doing is effectively banking.

Speaker 1 (00:48):
Yeah. I want to come to the open banking thing
with you, but on them actually being able to call
themselves a bank, that would probably force some people at
least have some kind of you know, it would clear
her in their head, wouldn't they wouldn't it.

Speaker 2 (01:02):
Absolutely, It's a perception thing as much as anything else,
because they would be then a bank, just like Kiwi
Bank or Westpac or any of the other banks, whereas
at the moment they have to describe themselves accurately as
a non bank financial institution. It's a bit of a
mouthful and it just carries a slight dodgy for the public.

Speaker 1 (01:22):
Yeah, so I wold hope.

Speaker 2 (01:23):
It doesn't sound dodgy, but it doesn't sound quite as
good as a bank.

Speaker 1 (01:26):
Yeah, that's a better way of putting it. Clear. This
is why you're the expert and I'm not. How do
you write their chances of being able to become a bank?

Speaker 2 (01:35):
Well, one would assume that having made the decision to apply,
that they've checked what the criteria and made sure they've
got all their ducks lined up so that they will
meet the criteria. But it isn't a fad a complete
it is something. It is an application. The Reserve Bank
has to be satisfied that they do meet all the
criteria and that they are suitable to be a registered bank.

(01:55):
So I would anticipate that they would get their license,
get their registration. But it's just not a guarantee.

Speaker 1 (02:02):
Okay, So on the open banking thing, are you a
skeptic on it? I'm a skeptic, are you?

Speaker 2 (02:08):
I am rather a spected. I understand how it operates largely,
but I haven't yet seen the benefits. And more importantly,
I haven't actually seen a model that makes it clear
how it's going to generate a sufficient profit or sufficient
revenue for it to be profitable for those that are
providing those services.

Speaker 1 (02:29):
And do you believe that it is going to be
the game changer that you or I need in order
to I don't know, switch banks willing nilly and you
bring the profits down and change everything.

Speaker 2 (02:42):
Yeah. I'm not persuaded that it's going to be that
sort of game painter. It will be good for some people,
and it will make a difference. I'm struggling to see
that it will be a game changer.

Speaker 1 (02:52):
Yeah. Okay, Claire, thanks very much, really appreciate it. Have
a lovely weekend. That's doctor Clare Matthews, who's a massive
university banking expert. For more from Hither Duplessy Allen Drive,
listen live to News Talk Set B from four pm weekdays,
or follow the podcast on iHeartRadio.