In many regards, New Zealand is known for being a trailblazer on the international stage. From jogging to jetboats and EFTPOS to PayWave, New Zealand has been pushing the boundaries of what we know. However, there are still some big ways in which New Zealand is lagging behind the rest of the world.
5. Virtual Cards
Starting with number 5, virtual cards are just like the payment cards in your wallet, except that they only exist digitally. You can see them on your phone and use the card number to pay for things online. Some virtual cards also work with Apple Pay or Google Pay, so you can use contactless payments at your favourite dairy, shop or café.
Virtual cards can be an awesome tool to help customers to prevent access to their money falling into the wrong hands. They’re also super convenient because you don’t need to bring your wallet with you for quick purchases. Some services even allow you to create different virtual cards, for different kinds of purchases, like online shopping or travel. Bank of America in the United States offers a virtual card that can be used to enhance privacy and security when shopping online.
While virtual cards are not yet widely adopted in New Zealand, some fintech (financial technology) businesses have started to explore the concept. Wise currently offers virtual cards, making it the ideal travel companion when you need a dedicated card for NZD and other currencies.
Debut is also bringing virtual cards to New Zealand. We think Kiwis will appreciate being able to set up dedicated cards for subscription payments that can be switched on or off whenever. Find out more about Debut and Virtual Cards here.
Debut Feature Spotlight: Virtual Cards
4. Open Banking
Next up is number 4: Open Banking is a system that lets banks and third-parties approved by the customer to share information to provide a better service. Open Banking gives customers more control over their financial data.
The UK and parts of the European Union have already set up rules around how banks and financial institutions can use and share customer data, leading to impressive new services, like account aggregation and personalised financial management. Such tools allow financial businesses to compare millions of accounts for new applications that help customers to budget smarter, detect fraud, get approved for a loan faster or to receive personalised financial advice.
New Zealand has only recently started taking steps towards establishing Open Banking regulations as the government explores its benefits. Read our primer on Open Banking here.
3. Biometric Authentication
You may have used your fingerprint or your face to unlock your phone or computer. This is known as biometric authentication. There are many different ways to use your unique physical characteristics to verify you’re really you – and not someone else pretending to be you.
New Zealand, Australia, the UK, USA and much of Europe use biometrics to verify you when passing through customs and many banks in NZ do offer biometric security to make it safe and secure when logging in to your account or when accessing customer service over the phone (voice). However, signing up as a new customer still often requires physically travelling to a branch and verifying your appearance against a driver license or passport. Some banks skip the verification process altogether.
HSBC in the UK lets new customers upload a photo of their ID or driver license and take a selfie to verify their identity when signing up for an account online.
Debut won’t have any branches, so it’s crucial that customers can sign up online and have peace of mind knowing that no one is spending or receiving money using their identity. We’re still exploring the best methods to make sure that the sign-up experience is streamlined and secure. Sign up for the Waiting List here.
2. Insurance as a Service (IaaS)
Insurance as a Service or IaaS lets people explore, activate and modify insurance plans by themselves online or through an app. People often have a great deal of flexibility and may have different options, like pay-as-you-go. Traditional insurance, by contrast, connects the customer to an agent who may help to select the coverage and set the costs for premiums based on calculations performed by the agent. This extra layer of interaction can slow down the process and actually make it more difficult for customers to comprehend their coverage, premiums, excesses and where the gaps are.
Lemonade is an Insurance provider in the USA that uses the IaaS model to offer a wide variety of insurance products, such as rental insurance, pet insurance, homeowners insurance and term life insurance. We are starting to see IaaS products rolling out for businesses through the likes of Spark and Reverra, but adoption from more traditional insurance providers is still slow.
Would you like to see Debut introduce insurance products in the future? Let us know what you’d like to see done differently. Leave us a comment in our Backstage user forum.
1. Neobanking
We’ve saved the best for last: Neobanks are exclusively available online, so they focus on creating a fantastic customer experience that lets customers do all of the regular things banks do and more, without the need to ever travel into a branch. Neobanks often focus on solving different kinds of customer problems and tend to offer more choices and controls to users.
Though there are some amazing Neobanks overseas, like Chime and Monzo – see our article on neobanks here, – neobanking is still very much in its early stages in New Zealand.
Debut is building a neobank natively in New Zealand with feedback and support from the Kiwi public. Our goal is to build the best financial products for our customers and to put $1 Billion back in Kiwi pockets. You can help us to shape neobanking in New Zealand by contributing to our community. Join our waiting list or invite your friends. Debut launches later this year.
There are a few themes when looking at why New Zealand is not quite keeping pace with the UK, US and even Australia. There’s seems to be a general lack of innovation as banks in New Zealand have been slow to adopt new technologies. For example, many banks were slow to roll out mobile banking and more recently, contactless payments. It’s only in the past twelve months or so we’ve seen online banking services start to get updates and features.
Although certain banks have recently promoted their attempts to reduce some of their fees, New Zealand banks have historically charged hefty fees. Excessive profits have lead some to question whether Kiwis are paying more than their fair share, resulting in an inquiry from the Commerce Commission. The New Zealand banking landscape also does not have a great deal of competition. Out of 27 banks in NZ, only four make up the vast majority of the profits and they’re mostly foreign-owned. Little competition can limit innovation.
In other areas of the New Zealand financial industry, some businesses have been criticised in the media for predatory lending practices and Buy Now Pay Later (BNPL) schemes set up in such a way that they encourage customers to create debt. The industry as a whole could also benefit from more diversity among management roles. The government has taken some steps to improve the situation, but more needs to be done. If the New Zealand banking and finance sector is to remain competitive, it needs to become more innovative, customer-focused, and inclusive.
The team here at Debut hope to shake things up, at least in our corner of the financial industry by building next-gen banking products in New Zealand. Debut will launch later this year and we’re already excited about future features already in the pipeline.
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Please note, Debut is not a registered bank under the Banking (Prudential Supervision) Act. This is about our future intentions. Investments with us are not supervised currently by the Reserve Bank of New Zealand.
