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Capital markets review highlights tech as enabler

Sarah Putt, Contributor. 10 September 2019, 6:27 pm

Greater collaboration between market participants and the Government through a coordinated tech strategy for New Zealand is recommended in the Capital Markets Review released by EY this week.

Admittedly the recommendation to "Develop a collaborative capital markets ICT Plan" is on page 87 (in a 104-page report) so its maybe not top of the list. But it's interesting that the authors have sought to gently nudge the Government into greater consideration around how tech can be an enabler for growing the financial sector.

"Market participants need to collaborate and work with Government (acknowledging the intention to appoint a Chief Technology Officer role or similar) on a coordinated review of the technological environment and how it should be deployed to improve the New Zealand capital markets ecosystem. We consider such a review important to ensure New Zealand's capital markets continue to evolve in the context of local and international technology developments."

The report is produced by the Capital Markets Steering Committee and contains a 'who's who' of the NZ financial community.

Martin Stearne,

Rob Campbell, Chair of SKYCITY and THL

Rachel Dunne, Partner, Chapman Tripp

Ross George, Managing Director, Direct Capital

James Lee, CEO, Jarden

Neil Paviour-Smith, Managing Director, Forsyth Barr

Jim Reardon, Treasurer, Westpac

Rebecca Thomas, CEO, Mint Asset Management

Matt Whineray, CEO, NZ Superannuation Fund

Geoff Zame, Head of Institutional Equities, Craigs Investment Partners

The report points out that the New Zealand Government, in contrast to US, Australia, UK, France, Singapore and Canada, has yet to frame policies for adopting emerging technology.  It then lists the tech for consideration, including Robotic Process Automation, AI, and smart contract technology. It also points to better use of data, for example earlier in the report, it notes that there is a lack of data on Kiwisaver.

"The lack of aggregated Government data on KiwiSaver was surprising to this review. We believe Inland Revenue should collect a full and anonymised dataset down to individual accounts of inflows and balances. Inland Revenue should also maintain all KiwiSaver aggregated data in one place. This would be a very useful set of data for Inland Revenue, FMA, CFFC, MBIE and the Treasury, among others."

With regards to blockchain technology, several exchanges overseas have developed strategic plans to encompass this in some form, but not in this country.

"New Zealand should frame a clear roadmap and regulatory landscape for advancement of blockchain technology. The NZX does have a memorandum of understanding with major international stock exchanges (Singapore, Shanghai, Hong Kong, Nasdaq) which allows for a collaborative approach to serve their end customers better," the report notes.

You can read the full report here.


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