Westpac NZ is piloting a new "basic" bank account with the aim of improving access to banking services.
The basic bank account will be a transactional bank account with simplified functionality.
Westpac NZ CEO Catherine McGrath says the basic bank account is intended to help New Zealanders who, due to their circumstances, may need additional support to meet the 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.
"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.
"Interviewees in that research said banks need to do a better job of serving customers who may be in challenging circumstances. We've taken those insights on board and are taking this next step by piloting the basic bank account."
Westpac engaged closely with the Reserve Bank of New Zealand (RBNZ), as well as in consultation with the banking industry, to develop the pilot. The bank will take referrals for the pilot from community groups, as well as through Westpac's Extra Care team.
Tom Bayliss, the RBNZ's Principal Adviser, Financial Inclusion, says the RBNZ welcomes the approach taken by Westpac to pilot a basic bank account.
"An inclusive financial system is one in which all New Zealanders have reasonable access to financial products and services that meet their needs," Mr Bayliss says.
"We would like to see other banks pilot basic bank accounts, as an important contribution to financial inclusion for underserved and excluded customers."
A basic bank account was one of the recommendations of the Commerce Commission's Market Study into Personal Banking Services.
"In some cases, these kinds of accounts may serve as a pathway, with some people ultimately able to transition to a regular bank account," Ms McGrath says.
"For those people who may be on this pathway, we believe it's important for financial education to also play a part. 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."
The basic bank account pilot is the latest initiative in Westpac's programme of work to improve access to banking.
The bank recently worked with the Ministry of Social Development's (MSD) Youth Service to introduce a new process to support young people to open bank accounts without needing consent from a parent or guardian.
The process allows young people who are living independently from family or have children in their care and who are working with Youth Service providers to use standard ID or a birth certificate as primary identification, with a letter from MSD able to be accepted as a secondary form of ID/proof of address. Westpac has a similar process for children in the care of Oranga Tamariki.
Westpac has also been working with the Department of Corrections to provide bank accounts for newly released prisoners to help them reintegrate into society.
The New Start programme provides prisoners with a debit card and a bank account at the time they are released. Nearly 500 accounts have now been opened through this programme.
