Strong profitability in New Zealand’s non-bank sector during 2016 driven by increased consumer confidence and a focusing of bank lending.
New Zealand finance companies and credit unions have again experienced strong growth in 2016. Key findings from the survey reveal:
However, the coming year is going to be more challenging for the non-bank sector. In recent months some of the sector have found it more difficult to secure the funds they require and expected rises in offshore wholesale funding costs as well as competition for funds within the local deposits market, will increase this pressure.
To help ensure growth in the coming years, many of the sector’s executives reported innovation and additional product offerings as key areas of focus. In response to the disruption caused by the growth of peer to peer lending, a number of participants are considering how Fintech partnerships might bring a new product or service to the market.
Data analytics are also playing a greater role in identifying new business opportunities through the analysis of transactions. In the not too distant future, companies that have yet to embrace this trend might find themselves lagging behind.