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The major banks have begun moving toward regulated open banking.
Photo: RNZ
The four largest banks are ready to partner with third-party financial service providers to offer more open banking services to customers.
ANZ, ASB, BNZ and Westpac have met Saturday’s deadline to have the technology in place for customers to securely share banking information with third party providers.
This is the second major milestone for regulated open banking after banks began supporting payments through new digital connections with providers in May.
Payments NZ, the bank-owned governance body that oversees payment systems, said the developments are exciting.
Its API centre manager Phil Cass said the latest step allows customers to access and share data safely using international best practices.
“The really important part of that is the beginning of moving away from screen scraping. Screen scraping is where customers hand over their username and password to a third party to enable [the third party] to access their banking data.
“Through these open banking standards, the customer is always in control and never hands over the username or password. The bank will verify with the customer that they are who they say they are and that they want to share their data with a third party.”
He said it comes with plenty of benefits for customers.
“Aggregating data in one place from multiple banks so that will provide a comprehensive view of finances. Then based on that a review of spending habits can be undertaken and tailored financial advice for achieving financial goals can be provided.
“There will be faster loan decisions and lenders will potentially be able to lend money to people who are underserved through the use of traditional credit scoring.”
Cass said there has already been a high uptake of open banking and data on that will be released in the new year.
The four banks are due to implement newer versions of the open banking standards next year, while Kiwibank is expected to go live with the standards in 2026.
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