Focus on collaboration, innovation and responsible governance in NZ's financial services sector
The Financial Markets Authority (FMA) has set out its future priorities for financial services regulation, with a focus on fostering innovation, supporting market confidence, and ensuring strong conduct standards.
Speaking at the Future of Financial Services conference, Clare Bolingford (pictured), FMA executive director for licensing and conduct supervision, said the regulator’s approach is to work closely with industry on issues that cannot be solved by regulators, government, or businesses alone.
“We want a strong financial services sector that investors and consumers can have trust and confidence in. New Zealanders should have access to the best products and fairest financial services,” Bolingford said.
Innovation and governance at the core
Bolingford stressed that good regulation should not be limited to reacting to the last crisis but should look ahead to manage future risks and seize opportunities.
“A regime that has strong governance and risk management at its core, while also providing flexibility for varied business models and innovation, offers the potential to not just lift the financial services system, but productivity across New Zealand,” she said.
FMA’s fintech regulatory sandbox is one example, allowing six pilot companies to test products in a controlled environment. This, Bolingford noted, gives firms a better understanding of supervisory expectations while enabling adjustments before full commercial launch.
Emerging technology and tokenisation
FMA is also assessing the impact of tokenisation on New Zealand’s markets and plans to release a discussion document on the subject. Globally, tokenisation is driving investment in virtual asset infrastructure, changing how consumers access products and services.
“The key for us is getting input from the sector about what is helping and hindering the use of blockchain in financial products and services… and what benefits tokenisation might bring to consumers and financial markets,” Bolingford said.
Artificial intelligence: Risks and opportunities
AI is now a key focus for the regulator, particularly in areas such as credit underwriting, pricing, and capital allocation.
“AI is no longer just an efficiency play; it’s increasingly becoming a driver of strategy for financial services,” Bolingford said.
New research by the Financial Planning Standards Board (FPSB) found two-thirds of New Zealand financial advisers are already using AI or plan to within 12 months, with most believing it will improve advice delivery, quality, and access
FMA, while acknowledging AI’s potential, is urging firms to ensure governance and oversight of its use, with outputs that are “reliable, explainable and contestable” and sensitive information that remains protected.
Financial advice: Access and sustainability
In the financial advice sector, FMA has been gathering feedback on barriers to advice access under the new regime.
“We want to know what advisers are seeing, and how we need to reflect this in how we monitor and supervise firms,” Bolingford said.
The goal, she added, is to improve outcomes for both consumers and firms – enabling more New Zealanders to access advice and supporting the sector’s long-term viability.
Outcome-driven regulation
Bolingford emphasised that regulation should be focused on outcomes rather than process, citing recent actions such as the public Dear CEO letter on rising mortgage fraud, climate-related disclosure updates, and efforts to reduce listing costs on the NZX.
“Balancing innovation, conduct, and confidence isn’t always obvious or simple. But trying to find the right balance is what we, as a conduct regulator, do,” she said.
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