Minister of Commerce and Consumer Affairs David Clark has announced a move towards open banking that would allow customers to shift their data and accounts more easily between banks, but he said the implementation was still at least two years away.
Last July, the Government agreed to establish a consumer data right framework (CDR) which would require data holders like banks to allow customers to more easily move accounts.
“Open banking ensures banks must share customer information if they request it, making it easier for New Zealanders to compare mortgage rates, apply for loans and switch banks,” Clark said.
“Open banking is a requirement on the Australian owned banks’ parent companies across the ditch and is a fixture of the banking system in the UK. It’s a common place tool used overseas to increase competition and make it easier for customers to get better deals," he said.
“Under open banking if somebody wanted to re-fix their mortgage at a lower interest rate, they could ask their bank to securely share transaction information, with a competitor. They could also instruct their bank to share specific data with a financial adviser of their choice – meaning more tailored and timely advice.“
Clark said banking was a natural starting point for rolling out CDR.
"Banking was also the first sector designated in Australia so we can learn from them. I am also aware some banks here have proactively started building the infrastructure to facilitate a CDR,” he said.
Clark's news release also included notes saying that other sectors including financial services, telecommunications, insurance, energy, and health may be considered for CDR designation.
"The next step will be engagement and consultation, which will include the release of an exposure draft of legislation. It’s anticipated the work to implement open banking will take up to two years to introduce," Clark's office wrote.
22 Comments
New Zealand is so far behind the rest of the world on Fintech it's tragic.
I guess the banks are thinking along the lines of 'who needs fintech when you've had one of the hottest pty mkts on the the planet'? As long as you have online banking and an app, the customers are happy (as long as the bubble hums along). Most fintech is simply wallpaper and it's unclear what open banking means to most people. If it's just the ability to move data from one bank to another, we all know it should exist. What it should suggest to most people is that there's very little diff between bank brands.
"Most fintech is simply wallpaper..."
I understand the sentiment, but beg to differ. Shifting banks is just one use case. There are many more. Apps that allow bank account to bank account payments, avoiding the 2-3% merchant fees. Apps that allow flatmates to pool funds, or directly pay shared bills. Apps that obviate the need for the whole clumsy direct debit (DD) system. DD is archaic - simply the submission of a file to a bank for payment, without knowing whether accounts are still active, there are any funds are in them etc. leading to missed payments & penalty fees. Imagine apps that check that an account is operational and funds are present before a payment is attempted, provide an alert if a payment is going to be missed.
All of those things are happening but they are happening despite the banks. If the banks were forced to get onboard, then innovation would blossom, and blossom securely, rather than in the work-around, back-door kind of way they are having to be done at the moment.
Billions of dollars of profits but unable to implement the flexibility.
Yeah keep shifting the goal post.
No surprises there. We have not been able do build another harbor crossing for years. Just the same shifting the goal post.
Where is the belly fire to get something done in this country gone?
And I imagine once the FMA blunder in with their usual money laundering regulation, any convenience in swapping banks will be offset by all the current nonsense of establishing just who you are,...copies of passport, current utilities Bill's, trust deeds as applicable, all certified by a JP. ie, mountains of paperwork to burden the innocent but not unduly upset the "sharp" operators.
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