Financial Institution Licence - the Finance Direct experience

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. Finance Direct’s experience highlights the importance of being timely and proactive with your licence application, particularly for smaller firms.

The company applied for its licence in mid-2024. Risk Officer Jeanne Schaaffhausen, led the process and discusses the licensing journey with Anita Frazer, FMA's Head of Licensing & Regulatory Services.

Jeanne Schaaffhausen, Finance Direct Risk Officer

Finance Direct is a small firm, with only six employees. What motivated you to get your application done in such a timely way?

"We knew we needed to get it done and didn’t see any need to wait. We just wanted to get ourselves sorted and licensed. This was my first time going through the licensing process and I was grateful to the support I received from our FMA designate. We were able to get it in well ahead of time."

How long did it take you and your team to get ready for submitting your application – so people can understand what they are facing?

"It took 3-4 months for us to get the application together. I would stop and reflect and talk with others and then think about what the FMA was looking for. I felt better after talking with our designate that it was more about showing we understood what fair conduct is and we could demonstrate that - the FMA wasn’t looking for us to rewrite the book."

Did you experience any unexpected hurdles along the way – do you have any pointers for other entities getting ready to apply?

"It was a lot more user friendly than I was expecting. It was an easy-to-follow process, and the online portal was easy to use. I liked the simplicity of each step, and it was great to be able to pick up the phone and talk with our designate, who helped make the steps easier."

You have mentioned your designate a few times as supporting you, which is what we want to hear. Did you get any other support from the FMA?

"One occasion, in particular, was really appreciated when some of the FMA team came out and spent an hour with us working through our questions. I also attended the webinars which were helpful and the information sheet on the fair conduct programme for smaller firms was also useful."

What does it mean for Finance Direct to have been granted the FI licence?

"For us getting our licence was a relief and a gave us a clearer understanding of our ongoing compliance expectations, including the documents and procedures that we need to keep up with."