BNZ ahead of schedule
Bank of New Zealand (BNZ) has taken another critical step toward open banking becoming the first bank in New Zealand to meet a major milestone set by Payments NZ, an organisation that governs the country’s payments system.
BNZ has implemented the Payments NZ Account Information API v2.1 standards, which when open banking is fully operational, will enable New Zealanders to safely and securely share their financial information with approved providers.
The announcement comes a week after a report by the Commerce Commission, which touted open banking as integral to increasing competition in NZ’s banking sector and delivering better outcomes from consumers.
“While it sounds a little dull, API v2.1 is really the engine room of open data. It’s the piece of the tech puzzle that means our customers have full control over what data they share, who they share it with and importantly, it gives them control to stop sharing their data too,” said Karna Luke, BNZ’s Executive of Customer Products and Services.
Co-owned by ANZ, ASB, BNZ, Citi, HSBC, Kiwibank, TSB, and Westpac, Payments NZ plays a key role in establishing the open banking system. It currently has set New Zealand’s major banks the task of implementing Account Information API v2.1 standards by November this year.
This follows the May 2024 requirement for major banks to support payments via APIs, enabling direct account payments through third-party apps. BNZ achieved this in 2023.
Luke said the fact that the bank has reached the milestone three months ahead of schedule reflects the commitment that BNZ has made to support the implementation of open banking.
“Over 250,000 BNZ customers are already benefitting from innovative services made possible through this technology, including services from Xero, Volley, and Blinkpay, all of which connect to BNZ through secure APIs,” said Luke.
What it all means for customers
This secure access to real-time financial data empowers third-party providers and fintechs to provide customers with new, innovative, and highly personalised financial products and services. Potential use cases include:
Personalised budgeting tools
Apps that offer tailored budgeting advice based on real-time financial data and spending habits, helping users manage their finances more effectively.
Customised savings plans: Solutions that design personalised savings plans and automate transfers based on users’ financial behaviour and goals.
Advanced financial insights
Tools that provide detailed analysis of spending patterns and identify new financial opportunities, enhancing users’ understanding of their financial situation.
Streamlined loan applications
More efficient loan processes that simplify and speed up approval by leveraging comprehensive account information.
Fraud detection and prevention
Facilitating third party apps or services to use real-time account data to identify unusual activity, improving security.
“Being the first bank in New Zealand to deliver this API demonstrates our focus on helping drive the future of open banking in New Zealand,” said Luke.
“We’re excited to see more fintechs and developers join those we’re already working with to leverage this technology to create innovative solutions that will benefit our customers and the country.”
Calls intensify for the Consumer Data Right
While the major banks are already at different stages of their open banking journey, Luke said it’s also important to remember that banking services are just the beginning.
“The Customer and Product Data Bill currently progressing through Parliament will establish a Consumer Data Right (CDR) in New Zealand, enabling open data sharing across multiple sectors.”
In a recent article, Westpac NZ also agreed that the CDR is critical to establish the next phase of open banking, giving consumers more control.
BNZ said it would further unlock digital innovation, making it possible to do things like instantly and securely verifying your identity online, via the information held about you by your bank, insurer or power company, or finding the best deal across utility or insurance companies and switching easily.
Click here for more information about the Account Information API v2.1 and its capabilities.
See LinkedIn post here.
