Bank account access challenges for migrants and rural communities

Recent research by the Reserve Bank reveals challenges faced by various groups trying to open bank accounts. New migrants, non-English speakers, rural residents, and young people struggle the most. The study shows that one-third of bank staff report being unable to open accounts for customers regularly. One major hurdle is the strict identification requirements from anti-money laundering laws. Many people lack proof of address or photo ID, complicating the process. Additionally, the number of bank branches has significantly decreased, from 1,130 in 2011 to just 577 in 2022. Both urban and rural branches have reduced operating hours, further diminishing access to banking services. The research highlights that specific groups, including recent migrants and Māori trusts, are particularly affected. Young people transitioning out of care services also face difficulties, which could lead to long-term disadvantages in financial literacy and management. Tom Bayliss, a financial inclusion expert at the Reserve Bank, noted that banks' application of identification rules can vary. Some staff are more flexible, while others strictly follow guidelines. He suggested that introducing simpler bank accounts could help those without traditional identification open accounts for basic transactions. Globally, banking infrastructure changes have made access to accounts harder for some. To improve financial inclusivity, the Reserve Bank plans to track data on who cannot open accounts and offer guidance on handling flexible requirements. Assistant governor Simone Robbers emphasized that addressing these barriers is vital for empowering individuals and enhancing financial participation. Overall, the research sheds light on the need for banks in New Zealand to improve their onboarding processes and ensure access for all individuals.