Registered banks, licensed insurers, and licensed non-bank deposit takers in the business of providing one or more relevant services to New Zealanders will need to hold a financial institution licence by 31 March 2025 to continue operating.
Provident Insurance applied for their Financial Institution licence in early 2024. Altaaf Osman, Head of Risk and Compliance, discussed their licensing journey with Anita Frazer from the FMA, providing insights into the challenges and key milestones they faced during the process.
Altaaf, it’s a busy time for the financial markets sector with many competing priorities. What motivated Provident to get their application done in such a timely way?
We were aware there would be a large number of CoFI applications and for us it was a key priority to get our application in as early as possible. Our customers are key to our business, and we saw getting our fair conduct programme finalised as important. We were initially planning on finalising the application by the end of September 2024, but everything fell into place and we were able to confirm our FCP ahead of time. This then allowed us time to focus on the requirements we have highlighted within the FCP.
How long did it take you and your team to get ready for submitting your application? What did you need to do before hitting the submit button?
We started working on our Fair Conduct Programme about ten months ahead of submitting but were doing a lot of thinking prior to that, so I think it took approximately 13-15 months to understand all that was required. Planning was a key component of building the FCP and thereafter finding the correct individuals within the organization to enable us to populate the information was important. I had to work around our Board timings so that is another thing to consider.
Did you experience any unexpected hurdles along the way?
We had minimal hurdles, it was a reasonably smooth process for us. Being small and agile we were able to get things sorted quickly. I consistently spoke to our board on CoFI so they could understand where we were at, what we were doing, and what they needed to do to complete the process. All this takes time, I was lucky, because we are smaller, I could talk directly to my board chair and Board Audit and Risk Committee chair to get things done.
Do you have any pointers for other entities getting ready to apply?
The application guide was helpful, it was true to the application process so allowed us to get everything ready. I would encourage others to keep using it to understand what is expected. I would also encourage anyone who is unsure how to proceed to reach out to colleagues at other entities who have already been through the process.
What support did you receive along the way? Did you use any of the FMA’s resources, talk with our staff or attend any of our webinars?
FMA were always willing to assist when we asked for help, which was really appreciated. I attended a couple of online workshops which were very helpful. The guide was really useful too, it helped us to enhance our business over and above the requirements. I met with key FMA staff to talk through our fair conduct programme; they were able to help us with our outstanding questions.
Industry bodies were also very helpful throughout the process. They offered seminars and provided a lot of written resources to guide us through our application.
What does it mean for Provident to have been granted the FI licence?
For us as an insurer, we want to celebrate; it is incredible to have the licence. But this isn’t where we stop, we want to do more to support our customers and it’s important to remember that the FCP is a living document, and we will continue to improve and amend it.
For now, we will be embedding it in our company. We want everyone to be involved. We want to ensure good customer experiences happen all the time.
If you were to offer a key tip, what would it be?
Top tip: the licensing guide provided by FMA is an essential tool and should be used when entities are preparing their FCP. The guide helped tremendously as it sets out the licence application questions and what we need to demonstrate to meet the requirements. There were no surprises when it came to completing the online application as all the information is in the Guide.
Ready to start your FI licence application journey?
*Opinions expressed in this article are those of the participant and not of the FMA.
