Open banking in Aotearoa

“The creative destruction of financial services.” “The dawn of the democratisation of data without barriers.” “The biggest shake-up the banking sector has ever seen.”

There are plenty of experts predicting big things from open banking and banking staff wouldn’t be blamed for shaking in their boots if reading these headlines in isolation.

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But I’d argue open banking is a good thing – and it’s an opportunity banks are going to embrace. So what does it all mean?

“We think an open data economy is where the real opportunity lies for New Zealand.”

Global movement

At its most basic level, open banking recognises customers own their own data – banks don’t own that data. So customers have a right to share that data with third parties, when and if they want to share it.

Of course, there are plenty of examples where banks like ANZ already do this. For instance, we enabled over 100,000 business customers to share transaction data with cloud accounting providers like Xero and MYOB.

However what open banking will do is standardise the way we do this – from what we share and how, to how we get customers to provide consent, and how we ensure that data is safe.

Open banking is a global movement - there are more than 30 markets talking about it, driven by a range of factors, including promoting competition, increasing innovation, improving customer experience and financial inclusion, and increasing security.

While some countries like the UK and Australia are adopting a ‘regulation-led’ model, in New Zealand the government is waiting to see the outcome of an ‘industry-led’ approach.

Going further

Industry group Payments NZ has been leading this approach for Kiwis. Along with banks and third party providers like Datacom, it has developed a first set of standards that outline the rules and methods for open banking in New Zealand. This is an impressive achievement for such a group, one that has been several years in the making, and one that is impressing international experts.

The ‘API Centre’, a separate entity that will manage the standards, was recently launched. ANZ will continue to be an active part of these discussions - there are some very clever people doing excellent work, and we can’t underestimate the power of collaboration and forming good partnerships.

It’s important to note that it’s still reasonably early days here in New Zealand and ANZ believes open banking will bring about incredible opportunities.

In fact - we’d like it to go further. We think an open data economy - where all major institutions are required to share their data if a customer requests - is where the real opportunity lies for New Zealand. These include new business models, more opportunities for research, improved policy development, and more efficient delivery of social services like welfare, healthcare and policing - to name just a few.

Uncertain future

For now, there’s a cross-bank team developing use cases we believe will give our customers a better banking experience - and that’s what we are about at ANZ. But there are a lot of questions about data governance, ethics, privacy and accessibility to work through to ensure we make this experience seamless, safe and valuable for our customers and the community in general.

Like all big technology changes, open banking will bring opportunities we can’t even imagine now. And although the future is uncertain, ANZ cannot afford to wait and see how it unfolds.

Liz Maguire is Head of Digital and Transformation at ANZ in New Zealand.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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