The Financial Markets Authority (FMA) has outlined its future priorities for New Zealand’s financial services regulation, placing emphasis on fostering innovation, strengthening market confidence, and maintaining high conduct standards.
Speaking at the Future of Financial Services conference, FMA executive director for licensing and conduct supervision Clare Bolingford said the regulator aims to work collaboratively with industry on challenges that cannot be solved by regulators, government, or businesses alone, claims MPA.
“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. She stressed that effective regulation should look ahead to manage future risks and capture opportunities, rather than merely reacting to the last crisis.
Bolingford added that a regime with strong governance and risk management at its core, coupled with flexibility for varied business models and innovation, has the potential to boost both the financial services system and national productivity.
One example is the FMA’s FinTech regulatory sandbox, which allows six pilot companies to test products in a controlled environment. This initiative helps firms better understand supervisory expectations and make adjustments before commercial launch.
The regulator is also turning its attention to tokenisation, assessing its potential impact on New Zealand’s markets. A discussion document will be released to gather sector input on blockchain’s role in financial products and services, as well as the benefits tokenisation could bring to consumers and markets.
Artificial intelligence is another key priority, particularly in 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. Research from the Financial Planning Standards Board found that two-thirds of New Zealand financial advisers are already using AI or plan to within the next year, with most expecting it to improve advice delivery, quality, and access. The FMA is urging firms to ensure governance and oversight of AI use, with outputs that are “reliable, explainable and contestable” while safeguarding sensitive data.
On financial advice, the FMA is gathering feedback on barriers to access under the new regime. Bolingford said the goal is to improve outcomes for consumers and firms, enabling broader access to advice while supporting the sector’s sustainability.
She also noted that regulation should be outcome-driven rather than process-heavy, pointing to recent actions such as a Dear CEO letter on rising mortgage fraud, climate-related disclosure updates, and efforts to lower NZX listing costs. “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.
