If the Reserve Bank (RBNZ) Assistant Governor for Financial Stability could wave a magic wand and speed up the central bank’s pace on legislative and regulatory changes, he would.
Angus McGregor, who leads the RBNZ’s financial stability group, told attendees at an INFINZ event on Thursday evening, following a speech about the future of banking, that legislative and regulatory changes were not a straightforward process for the central bank.
McGregor had been asked why the Deposit Takers Act (DTA) was taking such a long period of time to implement.
The DTA framework will oversee the regulation of all banks and non-bank deposit takers (NBDTs) in New Zealand under a single prudential regime. The Act was passed in 2023, the final piece of legislation from a review the RBNZ started in 2017. The DTA is set to be fully implemented by December 2028.
“It would be great if we could move faster. One of the key challenges we face in this situation is ensuring that we take industry with us on that journey. The feedback we get consistently from industry is we move too quickly. And equally, it does take time to get these settings right,” McGregor said.
“If we rush things, they roll.”
He added it was important that the RBNZ does things “in a focused way.”
“But legislative change and the regulatory change that follows that is not straightforward. There are many competing challenges associated with that. If I could wave a magic wand and we could do it faster, rest assured, I'd love it,” he said.
“But these things, sadly, they do take time. But I hear that criticism. It's a valid challenge in terms of the pace of regulatory change.”
As part of the DTA, a Depositor Compensation Scheme (DCS) was introduced in July 2025. The DCS protects up to $100,000 per eligible depositor, per licensed bank, building society, credit union and deposit-taking finance company, in the event of deposit taker failure. The RBNZ noted in its Financial Stability Report in May that since the DCS was implemented, residential mortgage lending by finance companies has risen over 30% and depositors are putting more of their money into finance companies.
'We're so late to the party'
The RBNZ’s newly published banking study found that a successful future NZ banking system would require, among other things, modern and resilient payment infrastructure.
This isn’t solely within the control of one organisation, according to McGregor, and will instead require collaboration across the financial industry, government, regulators and infrastructure providers.
McGregor was asked how the Reserve Bank intends to encourage fintechs already offering innovative payment products to collaborate with major banks.
Big banks have traditionally run on older technology infrastructure and legacy systems, a reason they often point to for their slower pace in adopting new technologies and rolling out innovative products, compared to fintech players.
“We certainly don't kid ourselves that through something like payments modernisation, we're easily going to land on one single thing that everyone just goes, yeah, that's it. It's challenging,” McGregor said.
“On the other hand, because we're so late to the party, we have the benefit of seeing what other jurisdictions and countries have done. But we don't kid ourselves that it's straightforward.”
Payments are a key focus for the RBNZ, with the central bank releasing an issues paper called Modernising New Zealand’s Retail Payment System in August. The paper found NZ is the only OECD country without a modern payment system, noting EFTPOS remains the country's only major domestic payment platform.
When Canada launches its real-time payments system later this year, NZ will be the sole OECD country without real-time payment capabilities.
McGregor said many stakeholders agree with the RBNZ that upgrading the country’s payment governance and infrastructure is “essential” for NZ’s economic progress, but it will require the financial sector to “invest together.”
“You think about the innovative ways that New Zealand has operated in the past, like EFTPOS back in the day, you know, we were at the forefront,” he said.
“We're not at the forefront anymore, and other countries are much more advanced in this context. So, it is essential, I would say, that New Zealand Inc gets payments modernisation underway. Now, who plays their part in that process is a completely different question, of course.”
The RBNZ wants the “broadest involvement” possible, according to McGregor, who said the RBNZ was currently playing a “critical leadership” role in delivering payments modernisation.
“We're trying to bring broad stakeholders together to deliver those much-needed governance and infrastructure investments and reforms,” he said, adding that there were different drivers for different players and participants in the market, “some who may be more inclined and less inclined to be involved,” he said.
“But I would encourage all market participants to look at the opportunities to get involved and think of it in terms of the best outcomes for New Zealand and New Zealanders. But I don't pretend that it's straightforward and that it's easy or that everyone agrees.”
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