Pilot Programme to Boost Competition and Innovation in Fintech Sector

The new initiative, known as a regulatory sandbox, will enable fintechs to experiment with products in a controlled environment, driving innovation and offering greater choice for Kiwi consumers.

Commerce and Consumer Affairs Minister Andrew Bayly has announced the launch of a bespoke pilot programme aimed at boosting competition in New Zealand’s financial and banking sectors by supporting the growth of financial technology companies (fintechs). The new initiative, known as a regulatory sandbox, will enable fintechs to experiment with products in a controlled environment, driving innovation and offering greater choice for Kiwi consumers.

Supporting Growth in the Fintech Industry: “The Government is committed to fostering greater competition in order to improve outcomes for Kiwis,” Minister Bayly said. “Fintech companies offer a significant opportunity to diversify the financial landscape. They challenge traditional banking models by providing alternative ways for consumers to manage their money, invest, make payments, and conduct business.”

The regulatory sandbox will allow fintechs to operate and refine their products under regulatory supervision before launching commercially. This initiative will save businesses time, reduce costs, and enhance consumer protection, while also identifying and eliminating unnecessary regulatory barriers.

Unlocking Potential for Innovation: Minister Bayly emphasized that fintechs are vital for New Zealand’s economy, encouraging innovation and positioning the country as a hub for high-value, high-wage industries. “Entrepreneurial Kiwis have already developed several world-leading fintech companies, but we need to expand this success and create a scalable fintech sector. Our goal is not just to have a few unicorns but to build an entire industry that thrives locally and exports globally,” he added.

While New Zealand has seen impressive fintech developments, many startups face challenges related to complex regulations. The new sandbox environment will allow them to navigate these hurdles in a controlled setting, testing their products for regulatory compliance before going to market.

Partnership with Financial Markets Authority and FinTech NZ: The regulatory sandbox has been developed through a partnership between the Financial Markets Authority (FMA) and FinTech NZ. This collaboration will provide fintech companies with the resources they need to overcome regulatory challenges, ensuring they are well-positioned for success in the New Zealand market and beyond.

“By providing a testing ground for fintechs, we aim to lower barriers to entry, accelerate innovation, and ensure that New Zealand remains at the forefront of the fintech revolution,” Minister Bayly said.

Consumer Benefits and Future Growth: The pilot programme is expected to deliver significant long-term benefits for New Zealanders, including greater access to a range of financial services and products. As fintechs grow, they will provide more competitive options for managing finances, leading to improved services and greater financial freedom for consumers.

“The fintech sector’s growth will not only lead to more choices and better services for Kiwis, but it will also create new employment opportunities and help drive economic growth. This is an exciting time for New Zealand’s financial technology industry, and we are committed to supporting its development,” Bayly concluded.

The regulatory sandbox pilot will be the first step toward establishing a robust, world-leading fintech industry that offers more financial freedom and improved outcomes for hardworking Kiwis.