Shaun Drylie says banking managers are having to spend time and energy complying with Government rules when they could be working on innovation.
Drylie is leaving after five years as chief executive of SBS and 35 years after he started work as a bank teller in Hokitika.
On the way out, he has aimed some criticism at the Government for making the banking business harder than it needs to be.
He says many reforms to the financial sector have been positive.
“But my key message is that a lot of the regulations that have been put on banks to protect the customers are putting a huge amount of internal pressure on banks.
“It means a lot of the focus of the banks is not on innovation but on regulation and compliance.”
Drylie says the challenge is to lighten the regulatory burden so that banks can spend more time developing their business rather than working hard to meet a heavy compliance regime.
“Things like the financial services legislation, the Credit Contracts Act - big pieces of legislation - can put a huge burden on financial organisations.
“It means their whole change programme internally is focussed on complying with new legislation rather than doing other work to innovate product and services.”
Fixing this problem will not be on Drylie's agenda, however, since he is basically leaving the banking industry behind, at least in an executive capacity.
He plans to settle in Christchurch for family reasons. He has elderly parents a few hours drive away on the West Coast, and children going through their education which will be focussed on Christchurch.
He will meanwhile look around for other work, perhaps in boardrooms, or perhaps in mentoring or consultancy.
Drylie leaves SBS in a strong position, with its latest profit of $55.2 million a big improvement on the previous year's $21.3 million, which was caused by big Covid-derived impairments.
”This year will be even better. We have got some positive growth in our balance sheet, our team morale is good and our customer satisfaction is good ...I am proud of where I leave SBS.”
Shaun Drylie concedes banks like his will always face a challenge in competing with giants like Westpac or the ANZ.
“They have about 85% of the market, so what we have to be good at is finding a niche, finding the customers that we appeal to and not trying to be all things to all people.
”Banking is very competitive, you have to be great at what you do.”
SBS was established in Invercargill in 1869, and was a building society for many years. It became a registered bank in 2008, but remains a mutual society, owned by its customers.