Under a new open banking system, the New Zealand government has mandated banks to begin exchanging data with rivals.
In July of last year, the Government decided to develop a consumer data right framework (CDR) that would oblige data holders such as banks to guarantee that New Zealanders had access to a broader selection of goods and services that match their requirements.
David Clark, minister of commerce and consumer affairs, says: “The banking sector is a natural starting point for rolling out consumer data rights, as the industry has already made significant progress towards open banking on their own. Banking was also the first sector designated in Australia so we can learn from them.”
According to him, the implementation of open banking would allow clients to shop around for better offers, requiring banks to work harder to match the services given by creative companies.
“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,” says Clark. “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.”
“The businesses and services wishing to receive this data would have to meet a number of safeguards to ensure the information could be handled safely and securely,” he adds.
