The Reserve Bank of New Zealand announced in May 2026 that finance companies and other deposit takers may now call themselves banks [1, 2].
This regulatory shift aims to level the playing field between traditional banks and non-bank financial institutions. By removing the restriction on the term "bank," the central bank hopes to foster greater competition in the financial sector, particularly following recent changes to deposit-insurance rules [1, 2].
The move comes as non-bank institutions see a significant rise in consumer trust and capital. Deposits with finance companies have increased 30% since the beginning of 2025 [2]. This surge indicates a shift in where New Zealanders are choosing to store their savings, outpacing the growth seen in traditional banking institutions [2].
Under the previous framework, the title of "bank" was reserved for a specific class of registered institutions. The new rule allows other deposit takers to rebrand, provided they meet the necessary regulatory requirements. The Reserve Bank said the change is intended to enhance competition among all entities that take deposits from the public [1].
Industry analysts suggest that the ability to use the "bank" label reduces the perceived risk for consumers. Many customers associate the term with stability and security, even when non-bank entities provide similar services or insurance protections [1].
As these companies begin their rebranding efforts, the Reserve Bank will continue to monitor the impact on market stability. The central bank said the primary goal is to ensure that competition leads to better rates and services for consumers without compromising the integrity of the financial system [1].
“Deposits with finance companies have increased 30% since the beginning of 2025”
This regulatory change signals a move toward a more fluid financial landscape in New Zealand. By decoupling the legal definition of a bank from the marketing term, the government is acknowledging that non-bank deposit takers have become systemic competitors to major banks. This likely reflects a strategy to break the dominance of a few large players by allowing smaller firms to gain the psychological trust associated with the 'bank' brand.
