A basic bank account was designed as a transactional bank account with simplified functionality, and among recommendations of the Commerce Commission’s Market Study into personal banking services.
Westpac NZ chief executive Catherine McGrath said the basic bank account was intended for customers who may need additional support to open an account, such as those who do not meet current legal identification requirements for a bank account, or who may be in vulnerable circumstances and need additional restrictions on their account.
“A bank account is like a passport to the economy. Without one, you struggle to receive work or benefit payments, pay bills or do many of the other day-to-day tasks that allow you to participate in society,” McGrath said.
“Research we have commissioned over the past few years, including the Westpac NZ access to banking in Aotearoa report and the Westpac NZ disability and inclusion in banking report, has really brought home the need to reduce the barriers to opening a bank account.”
She said Westpac consulted with the Reserve Bank and banking industry to develop the pilot, with referrals from community groups, as well as through Westpac’s extra care team.
RBNZ principal adviser for financial inclusion Tom Bayliss said all New Zealanders should have reasonable access to financial products and services that met their needs.
“We would like to see other banks pilot basic bank accounts, as an important contribution to financial inclusion for underserved and excluded customers,” he said
McGrath said the basic accounts may serve as a pathway to a regular bank account.
“With that in mind, we’ll be providing financial education resources to people with basic bank accounts, as well as recommending relevant workshops in our managing your money financial wellbeing programme,” she said.
In addition to the pilot, Westpac was working with the Ministry of Social Development’s youth service to introduce a new process to support young people to open bank accounts without needing consent from a parent or guardian.
Westpac was also working with the Department of Corrections to provide bank accounts for newly released prisoners to help them reintegrate into society, with nearly 500 accounts opened through this programme.
