NEW Zealand's big banks have hit a sweet spot of solid growth in household and corporate lending but it may not last, a report by PwC says.
THE Future Shape of Banking report says non-banks - financial institutions which don't meet full bank requirements - are a threat and barriers to them will decline.
It says New Zealand could exist without banks of the traditional kind by 2025 to 2030.
"New Zealand's banks remain profitable, but the industry needs to consider how long this strong performance can continue with technology, customers and regulation changing everything," PwC New Zealand's financial services leader Bruce Baillie says.
Technology is getting cheaper, reducing one barrier to entry. But brands, reputations and familiarity favour traditional banks.
New Zealand's biggest banks are Australian owned. ANZ and Westpac operate in New Zealand, National Australia Bank owns BNZ and Commonwealth Bank of Australia owns ASB.
Ironically, the report suggests New Zealand's banking industry could be vulnerable to challenges from Europe's banking industry because the continent suffered more severely during the global financial crisis.
"Europe's banks faced close scrutiny, and a raft of regulatory reform well beyond what we've seen in Australasia following the financial crisis, with some institutions brought to their knees," Mr Baillie said.
Those that survived have emerged stronger, more innovative and agile than their counterparts around the world, he said.
"Ongoing stress tests and a far more challenging market than New Zealand positions Europe's banks well and poses a threat to New Zealand's industry," Mr Baillie says.Author : AAP
Source : Perth Now News