ADR-014: Deposit and lending product set — launch sequencing¶
| Status | Accepted |
| Date | 2026-04-10 |
| Deciders | CEO, Head of Product, CRO, CFO |
| Affects repos | bank-core, bank-credit, bank-payments, bank-app |
Status¶
Accepted — 2026-04-10
Scope assumption¶
This ADR applies exclusively to the bank business model — the scenario where this organisation operates as a licensed deposit-taking institution (registered bank in NZ under the RESA Act; authorised deposit-taking institution in AU under the Banking Act). All sequencing rationale, capital treatment, and regulatory references in this ADR assume that the organisation holds or is obtaining a banking licence and carries the associated balance sheet obligations.
This ADR does not apply to a SaaS business model. If the platform is offered as a licensed SaaS product to third-party banks or fintechs, the operator does not carry the deposit-taking licence, the RWA capital obligations, or the prudential obligations to RBNZ and APRA. A SaaS operator's product sequencing is driven by implementation complexity, customer demand, and commercial contracts with its bank clients — not by the operator's own capital adequacy or regulatory product approvals. A separate ADR must be written if the SaaS business model is pursued.
Context¶
The bank must choose which products to launch at day one, which to add in the first 3–6 months, and which to target at 12+ months. The wrong sequencing creates regulatory complexity, capital drag, and operational risk before the bank has proven its core platform. The right sequencing builds a stable deposit base, establishes customer relationships, and generates the data needed to underwrite lending responsibly.
The key constraints are: regulatory capital treatment (deposits are 0% RWA; lending products consume capital), operational complexity at launch, the time required for responsible lending credit model training, and the dual-jurisdiction regulatory obligations in NZ and AU.
Decision¶
Product launch follows a three-tier sequencing model: deposits first to build the funding base and customer relationships, early lending from 3–6 months once the credit model has data, and complex products at 12+ months once the platform is proven and capital is adequate.
Tier 1 — Day one (both NZ and AU)¶
Everyday transaction account¶
NZD and AUD accounts. Debit card, real-time payments, no monthly fee. This is the primary customer acquisition product — every customer starts here. Without this, no other product can be offered.
Why it comes first: It is the relationship anchor. A customer who moves their salary to this account creates the transaction data needed to underwrite credit, the balance data needed to assess affordability, and the behavioural data needed to improve fraud and AML models. Day one without it is not viable.
Regulatory complexity: Low. RESA Act (NZ), Banking Act (AU). No credit obligations, no disclosure requirements beyond account terms.
Capital treatment: 0% RWA for deposit balances.
High-interest savings account¶
Competitive rate above incumbents, with bonus rate conditions. This is the deposit-gathering engine. A rate materially above the major banks is the reason a customer moves money from their existing bank and keeps it here.
Why it comes first: Kiwibank, Up Bank (AU), and 86 400 all used this playbook. It gives customers a concrete, immediate financial benefit. It builds the stable deposit base the bank needs before it can lend. Regulators look favourably on a growing savings book when assessing capital adequacy.
Capital treatment: 0% RWA.
Term deposit (30 days – 24 months)¶
Fixed rate, fixed term. Customers commit funds for a period; the bank knows the cost and duration of that funding.
Why it comes first: Term deposits are more valuable to the bank than they appear. They lock in funding at a known cost for a defined period, making interest rate risk and liquidity management significantly easier. RBNZ and APRA both look favourably on a stable term deposit book. The product is simple to operate and the regulatory obligations are well-understood.
Capital treatment: 0% RWA. Provides stable funding for the NSFR calculation.
Tier 2 — 3–6 months post-launch¶
Personal loan (unsecured)¶
Fixed rate, 1–7 year terms. Real-time credit decision powered by the Snowflake affordability and credit scoring model.
Why 3–6 months, not day one: The credit model needs transaction data to make good decisions. A customer whose salary has been received for 2–3 months, whose spending patterns are understood, and whose income has been verified via open banking data is a better credit risk than an unknown customer who opened an account yesterday. Launching lending immediately means underwriting blind; waiting 3–6 months means underwriting with data.
Regulatory complexity: Medium. CCCFA 2003 (NZ) responsible lending, NCCP Act (AU). Affordability assessment must be documented for every application. The Snowflake credit decisioning engine satisfies this by design — every decision produces a documented affordability calculation with full audit trail.
Capital treatment: 75% RWA under Basel III standardised approach.
Arranged overdraft¶
Pre-approved limit on the transaction account. Daily interest. Lower operational risk than term lending because the exposure self-liquidates when salary arrives.
Why 3–6 months: Same data rationale as personal loans. Pre-approval is computed nightly in Snowflake and written back to Postgres. Customer acceptance is one-tap — no new credit assessment required at the moment of drawdown.
Notice saver (32–90 day notice period)¶
Higher rate than instant savings. Customer must give notice before withdrawing.
Why 3–6 months: Improves the bank's liability duration profile. Customers saving for a defined goal (house deposit, holiday) prefer a higher rate with a notice period. Operationally simple to add once the savings account infrastructure exists.
Tier 3 — 12+ months¶
Home loan / mortgage¶
Highest customer value product. Significant capital consumption, credit risk, and operational complexity.
Why not earlier: LVR restrictions in NZ (RBNZ sets speed limits on high-LVR lending), valuation panel requirements, title searches, solicitor involvement, and the capital treatment under APS 112 all add operational surface area. At launch, the bank's deposit base will not be large enough to fund a mortgage book from the balance sheet — warehouse funding or securitisation is needed, which requires establishing credit relationships with wholesale funders. Build toward this from day one but do not attempt to launch it until the platform and balance sheet can support it.
NZ-specific note: The CCCFA amendments introduced significant responsible lending obligations around income and expense verification. The credit decisioning engine must produce a documented affordability assessment for every loan, with an audit trail demonstrating the lender made reasonable inquiries. Build this into the Snowflake decision model from day one so it is available when mortgages launch.
Credit card¶
High customer demand, operationally heavy. Requires card scheme membership or partnership, revolving credit infrastructure, statements cycle, disputes process, and scheme compliance overhead. Phase 3.
Business accounts¶
SME segment requires separate KYB onboarding, NZBN/ABN verification, and multi-user access. Consider only after the retail platform is proven.
Foreign currency accounts (USD, EUR, GBP)¶
Extends the cross-border value proposition beyond NZD/AUD. Requires FX partner for additional currencies. Phase 3.
Regulatory product-by-product summary¶
| Product | Key NZ regulation | Key AU regulation | Capital | Launch complexity |
|---|---|---|---|---|
| Everyday account | RESA Act, Payments NZ | Banking Act, NPP | 0% RWA | Low |
| Savings account | RESA Act, CCCFA | Banking Act, FCS | 0% RWA | Low |
| Term deposit | RESA Act | Banking Act, FCS | 0% RWA | Low |
| Notice saver | RESA Act | Banking Act | 0% RWA | Low |
| Arranged overdraft | CCCFA 2003, RBNZ capital | NCC/NCCP, RHB | 75% RWA | Low–medium |
| Personal loan | CCCFA 2003 | NCC/NCCP, APS 112 | 75% RWA | Medium |
| Home loan | CCCFA, RBNZ LVR rules | NCCP, APS 112, ASIC RG 209 | 35–100% RWA | High |
| Credit card | CCCFA, scheme rules | NCCP, ASIC RG 209, scheme rules | 75–100% RWA | High |
AU-specific product note¶
The Australian Financial Claims Scheme (FCS) protects deposits up to AUD 250,000 per account holder at an ADI. In NZ, a deposit guarantee scheme has been legislated under the Deposit Takers Act 2023 and is being implemented. Both affect how deposit products are marketed and what disclosures are required at account opening.
Principles alignment¶
| Principle | Assessment | Notes |
|---|---|---|
| AP-001 KISS | ✓ | Start with the simplest products. Add complexity only when justified. |
| AP-003 Compliance | ✓ | Each tier's products match the bank's compliance capability at that stage |
| AP-005 Customer driven | ✓ | Products chosen for their customer acquisition and retention value |
| AP-006 Cost effective | ✓ | 0% RWA deposits build the balance sheet before capital-consuming lending begins |
| AP-007 Evolution | ✓ | Platform designed to add products without re-platforming |
Perspectives¶
| Perspective | Assessment | Notes |
|---|---|---|
| Strategy | ✓ | Proven neobank playbook — deposits first, lending second |
| Regulatory | ✓ | Tier 1 products have minimal regulatory complexity at launch |
| Risk | ✓ | Lending delayed until credit model has training data |
| Cost | ✓ | Capital requirements grow gradually as balance sheet grows |
| Capability | ✓ | Platform designed from day one for eventual mortgage capability |
See perspectives.md for how to use these evaluation lenses.
Relevant viewpoints¶
- Enterprise viewpoint — product set is the primary commercial offering to stakeholders and investors
- Functional viewpoint — product lifecycle from application through to servicing and closure
- Information viewpoint — product configuration, rate management, and terms stored in Postgres
- Operational viewpoint — rate change process, product performance monitoring, TMD review cadence
See viewpoints.md for guidance on producing these viewpoints.
Signoff record¶
| Date | Name | Role | Status |
|---|---|---|---|
| 2026-04-10 | Ross Millen | CTO | Approved |
| 2026-04-10 | Ross Millen | Head of Architecture | Approved |
| 2026-04-10 | Ross Millen | Head of Data | Approved |
Capabilities¶
| Capability | Description | Relationship |
|---|---|---|
| CAP-001 | NZ bank account (NZD) | governed — everyday account is Tier 1 day-one product |
| CAP-002 | AU bank account (AUD) | governed — AU everyday account is Tier 1 day-one product |
| CAP-051 | High-interest savings account | governed — savings account is Tier 1 day-one product |
| CAP-052 | Term deposits | governed — term deposit is Tier 1 day-one product |
| CAP-065 | Pre-approval engine (nightly eligibility scoring) | governed — pre-approval only valid after credit model has training data |
| CAP-068 | Automated credit decisioning engine | governed — credit decisioning unlocks after responsible lending data accumulates |
| CAP-069 | Affordability calculator (CCCFA/NCCP compliant) | governed — CCCFA/NCCP affordability documentation required for all lending |
| CAP-077 | Credit limit management & utilisation | governed — arranged overdraft is Tier 2 product (3–6 months) |
| CAP-078 | Loan amortisation engine | governed — personal loan is Tier 2 product requiring credit model training |
Related decisions¶
| ADR | Title | Relationship |
|---|---|---|
| ADR-015 | Cross-border NZ/AU wallet and transfer design | cross-border wallet is part of Tier 1 product set |
| ADR-018 | KYC and digital onboarding architecture | onboarding is the gateway to all products |
All ADRs
Compiled 2026-05-22 from source/entities/adrs/ADR-014.yaml