RBNZ looks to replicate banking dashboard for insurers

Thursday 4th October 2018

The Reserve Bank is lauding the success of its 'bank financial strength dashboard' and plans to replicate the tool in other sectors such as insurance and non-bank deposit takers.

The dashboard - launched in May - is a standalone website containing a series of charts and plain English explanations to help people make informed decisions when putting their money in a bank.

The dashboard "not only challenges banks to be open and transparent with their disclosures, but also gives the public the opportunity to take an active interest in monitoring their bank’s performance”, head of prudential supervision Toby Fiennes said in a speech for chartered accountants in Auckland.

Banks are required to publicly disclose information about their businesses, the risks they take and their financial resilience. The dashboard presents all disclosure information in one place so people can easily compare information across lenders.

Early indicators show it's been well received, Fiennes said. The site attracted more visits in the first 24 hours than the prior data set received in an entire year. The vast majority of visitors are in New Zealand. Importantly, he said that around 15 percent are return visitors, indicating the site is seen as a resource rather than a "one-off curiosity".

Dashboard users include creditors, owners, media, ratings agencies and the banks themselves. Initial feedback indicates users appreciate the accessibility and better quality of information and banks have improved the scrutiny applied to their own liquidity metrics now they're in the public domain, he said.

Looking ahead, Fiennes said the aim is to replicate it.

"Insurance is likely to be the next cab off the rank and we expect to start work in mid-2019, once we have a good sense of how the bank dashboard has worked," said Fiennes. The dashboard will make it possible to further improve transparency in the sector and the central bank's supervision of insurers, he said.

Both the banking and insurance sectors have been in the limelight after the Financial Markets Authority and the central bank launched a joint review of the culture and conduct of banks and life insurers. This followed a Royal Commission inquiry into Australia's financial sector, which discovered some disconcerting practices.

Fiennes said since the release of the inquiry's interim report, there is a lot of focus on misconduct and fair treatment of customers. The bank "would welcome ideas on whether there are 'conduct' metrics that could and should be included. The same question arises in the context of operating risk, such as business continuity arrangements", he said.

(BusinessDesk)

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