The Financial Markets Authority (FMA) has set out its regulatory priorities for the years ahead, placing innovation, market confidence, and strong conduct standards at the centre of its strategy.
Speaking at the Future of Financial Services conference, FMA executive director for licensing and conduct supervision Clare Bolingford said the regulator would focus on working closely with the industry to address challenges that cannot be solved by regulators, government, or businesses alone, claims the 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 added that good regulation should not only respond to past crises but anticipate future risks and opportunities.
Bolingford highlighted the importance of a regime that blends strong governance and risk management with flexibility for diverse business models and innovation. Such an approach, she said, could lift not only the financial services system but productivity across the country. One example is the FMA’s FinTech regulatory sandbox, which currently hosts six pilot companies testing products in a controlled environment. This, she explained, gives firms insights into supervisory expectations while enabling refinements before full-scale launch.
The regulator is also studying the impact of tokenisation on New Zealand markets, with plans to issue a discussion paper. Globally, tokenisation is reshaping investment in virtual asset infrastructure and altering 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 is another area of increasing focus, 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 do so within a year, with most expecting it to enhance advice quality and access. While recognising AI’s potential, the FMA is urging firms to ensure governance, oversight, and protection of sensitive data, with outputs that are “reliable, explainable and contestable.”
In the financial advice sector, the FMA is gathering feedback on barriers to access under the new regime, aiming to improve consumer outcomes and ensure the sector’s long-term sustainability. Bolingford emphasised that regulation should focus on outcomes, not processes, pointing to actions such as a public Dear CEO letter on rising mortgage fraud, climate disclosure updates, and measures 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.
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