Alongside these issues, the sector, like other sectors, faces increasing cyber risks and climate change risks. Cyber risks take on increasing importance when business models are continually digitised with customer platforms and data management central to business performance. We will issue cyber guidance for the banking sector in the fourth quarter that will be relevant for insurers also.
Like many central banks, the Reserve Bank has a strong interest in climate change. Climate change poses significant risks to New Zealand’s economy and financial system – and therefore financial stability. The medium-to long-term risks to financial institutions from climate change remain relevant through and well beyond the current crisis.