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Clark announces banks will be first designated for 'consumer data framework' to allow easy shifting of data and accounts, but implementation still 'two years away'

Banking / news
Clark announces banks will be first designated for 'consumer data framework' to allow easy shifting of data and accounts, but implementation still 'two years away'

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.

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22 Comments

New Zealand is so far behind the rest of the world on Fintech it's tragic.

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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. 

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"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.  

 

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It should be such a no brainer. 12 Hours behind The City. 

 

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This just seems like a threat to banks from Govt after excessive profits...

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The Govt could have started this as soon as Winnie put them into power but no,they wait until  pressure from the public due to alleged excessive profits and then move.

What a Govt they are.,won't do anything until a headline.

 

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Yes, they only like fighting fires... If only they paid the real firefighters the same as what they earn.

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... or , bought them a truck that doesn't breakdown on the way to the fire ...

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German and Korean saying: "now is better"

Kiwi saying: " better late than never"

LOL

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Jacinda saying : " Let's do this ... after the working group have reported their learnings . "

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Then disregard all of the recommendations from more competent people

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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? 

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The people who write reports get paid regardless of whether said thing gets built.

So you end up with lots of hearings, consultation, reports and case studies and very little building of actual things.

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4

People misdirect their outrage at cost blowouts on projects like Transmission Gully. 

*Shriek* $400k on an opening ceremony, what wasteful spending.  Meanwhile they sit idly when banks gobble up 10 - 15x that amount.

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Would the $21 Miliion spent on leases for 3 waters offices (3 Waters unlikely to go ahead or be repealed in Nov 2023) have got more value for Nzers if Pharmac had been funded with the money thats probably been wasted?????????????????

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Only regulation will force the issue, deadlines...  RBNZ going a touch soft after covid-19 and BS11... but it is coming.   IMHO its a good thing.  It will comoditize credit and prioritise service imho.

 

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Zero chance we have open banking within two years. This is just more governing by press release.

 

This would have been in place four years ago if Jacqui Dean had remained Minister.

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I'd love to be able to take account numbers, direct debits etc with me when changing banks.

The biggest hassle is getting everything set up for a new account.

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So when's the deadline?

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31st February 2121 if the muppets in power stay in power.

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2 years away? Ridiculous how far behind the 8 ball we are.

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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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