A new report from PwC says that by 2025, New Zealand could exist without banks as we know them today.

It says the barriers to entry for non-banks performing “core” banking services are declining and the business models of banks will be challenged.

The cost of technology infrastructure and bespoke systems had dropped to the point where they were not insurmountable to new entrants. Technology was also making it easier for customers to switch between banking providers.

PwC’s financial services leader Bruce Baillie said things were not looking any brighter for mortgage advisers.

“The issue for the mortgage advice industry is very similar to the issue life insurance advisers currently face.”

He said more banking products were being simplified so they could easily be offered online. Instead of having to go into the bank and sit down and talk to someone about a loan, people could apply via app or website.

That removed the mortgage adviser role of juggling paperwork and acting as an intermediary, he said. The offer of approaching multiple banks was also losing appeal as it became easier to quickly apply to several banks at once, Baillie said.

“What’s the role of the mortgage adviser in that world? They will struggle. Who will pay them when they can go online? They have a future only if they can offer value-added advice.”

Baillie suggested there could be an increase in aggregators who would get competitive quotes for advisers to offer their clients. “The future for mortgage adviser in an online world is finding the niche areas where they can offer value-added advice. That’s something people might be prepared to pay for. The challenge at the moment is that they are paid by the bank, it’s invisible to the customer. If that were to change… customers would have to be convinced the advice they were getting was worth it.”