Roger Beaumont: Banks to introduce Confirmation of Payee system

In a crucial step towards reducing scams, banks will introduce a Confirmation of Payee system next month to be fully in place by Easter of next year. 

The system notifies a customer if the name and account they are transferring money into don't match up. 

Similar schemes have been successful in Australia and the United Kingdom. 

New Zealand Banking Association Chief Executive Roger Beaumont joins Francesca Rudkin with more on how it works. 

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Episode Transcript

Speaker 1 (00:00):
And a crucial step towards reducing scams. Banks will introduce
a confirmation of payee system next month, to be fully
in placed by ester of next year. The system notifies
a customer whether the name and account they're paying to
match up or don't. Similar schemes have been successful in
Australia and the UK. New Zealand Banking Association Chief Executive
Roger Beaumont is with me now, good evening. Thanks for

(00:21):
your time, Roger.

Speaker 2 (00:22):
Oh, thanks for having me, Francesca.

Speaker 1 (00:24):
So how does this work, this new confirmation of payee system, Well.

Speaker 2 (00:30):
What it does is simply tries to match whether your
account that you're paying money into matches the name on
that account, and it'll to you whether it's a complete
match or a partial match or no match whatsoever. So
it just is another level of security and comfort for

(00:50):
customers in terms of being confident of when they're paying
money away to someone.

Speaker 1 (00:56):
Is it an instant mechanism when consumers make an online payment.

Speaker 2 (01:02):
Yes, because it will happen in real time when you're
about to enter the deep, when you're entering the details
of who you're paying money who and the account number,
and it'll give you that it'll give you that feedback well, fantastic,
Well before you make the payment, okay.

Speaker 1 (01:15):
So it's not like you make a payment and then
the bank's going to check check it all off, and
then they're going to come back to in process that
there's going to be no delay on payments.

Speaker 2 (01:22):
Then no, because it'll be it'll be checking checking with
you that you're confident that that's the right match before
the payment is actually made.

Speaker 1 (01:34):
How well will this protect consumers against scams?

Speaker 2 (01:38):
Well, it will certainly help in the war against scams,
which are a real scourge on our society. But it's
really important to remember there is no silver bullet here, franchise.
There is no one thing that's going to stop scams altogether,
because scammers are tricky and clever and they will find
workarounds wherever they can. So it's really important that customers

(01:59):
are vigilant in terms of their behavior and think about
really care think ready carefully about who they're paying and
what they're paying for. But this is another level of
protection that will help them in that process.

Speaker 1 (02:12):
Who drove action for this change, Oh.

Speaker 2 (02:15):
Look at the industry has been working on it for
quite some time. This is quite a big piece of
work that the government also encouraged us to look at.
But the industry has worked collaboratively to install this across
the teen retail banks so that they can work together
on this for customers.

Speaker 1 (02:35):
Can I be honest with you, Roger kind of feel
like this would have been a sensible thing to have
in place earlier, you know, when we started doing online banking.
I'm surprised that someone didn't think about it, but obviously
we didn't have the technology then.

Speaker 2 (02:48):
Yeah, and look, we have moved at pace to implement
this where we're working on a very very tight time
frame to get this live as quickly as possible. And
you know, we'll be one of a hand full of
countries around the world that have this level of technology.
So it's not commonplace. It's actually limited in the number

(03:09):
of jurisdictions that actually have it in place.

Speaker 1 (03:12):
And you know, banks are hoping to induce the system
next month. It's going to be fully in priced, but
fully in place by Easter next year. What does that mean.
It's sort of it's sort of what's happening in that
in that time frame.

Speaker 2 (03:26):
Yeah, it's being phased, and that's because banks need to
do proper testing of the systems and technology and make
sure that it works appropriately, and they have to make
changes to each of the way his customers interact with
their banks, so they'll have to do their online banking,
they'll have to do mobile banking apps, and they'll have

(03:48):
to do in branch and in customer. All as quite
unique ways of providing the service. So it's quite complex
and it's important that they get it right. It's a
much safer and appropriate way to have it. Stagger it
and do it when that confident.

Speaker 1 (04:06):
Thank you so much, Roger. That was New Zealand Banking
Association Chief executive Roger Beaumont with.

Speaker 2 (04:11):
Me for more from hither Duplessy Allen Drive. Listen live
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