Learn what open banking means for NZ's financial sector
Jonathon Dale, head of payments development at BNZ, said open banking will change how New Zealanders handle money, access services, and deal with banks. But how?
What is open banking?
Open banking allows you to securely share your financial data with authorised third-party providers through APIs (application programming interfaces). This system enables innovative and personalised financial services, such as budgeting tools and seamless payment options, while keeping your data safe and secure.
Practical benefits of open banking
Open banking can transform payments by enabling direct online purchases from your bank account without fees or cards. It also enhances financial management with apps that offer personalised insights based on your financial habits.
“Imagine an app that offers personalised insights, helping you to save, budget, and invest,” Dale said.
Promoting competition and innovation
Dale said that by allowing fintechs to access your financial data with consent, open banking fosters competition and innovation. This can lead to a wider range of products and services at competitive prices.
Applying for loans can be simplified, as financial information can be securely shared with lenders through APIs, potentially leading to faster approvals and better offers.
Making open banking a reality
Two key components are needed: consistent technology across the banking sector and supporting legislation.
New Zealand’s biggest banks must implement Payments NZ open banking API standards by 30 May 2024.
“At BNZ, we’ve been leading the charge in this space, providing API access to customers since 2018,” Dale said.
Additionally, legislation should empower individuals and businesses with greater control over their data, setting clear rules for data usage and liability.
Data security in open banking
Data security is paramount, Dale said.
Secure APIs ensure that your data is never directly accessed by external providers and can only be shared with your explicit consent. Standardised accreditation processes for fintechs will ensure only trusted providers participate in open banking.
Future of open banking
BNZ is excited about the future of open banking.
“As we continue to work towards a fully realized open banking system in New Zealand, we remain committed to ensuring the safety and security of our customers’ data,” Dale said, highlighting the opportunities for innovation and improved financial experiences.
Click here to read the BNZ blog.
How will open banking change how New Zealanders manage money and access services? Share your thoughts and join the discussion.
