New Zealand Bets on Open Banking to Offer More Consumer Choices
New Zealand is joining countries around the world in embracing opening banking, saying Thursday (Nov. 10) the sector will be the first to adopt its consumer data rights framework.
“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,” David Clark, the country’s minister of commerce and consumer affairs, said in a statement.
New Zealand adopted the consumer data rights framework last year. It requires data holders such as banks to ensure New Zealanders can access a broader range of products and services that better suit their needs.
Clark said open banking — already a fixture in the U.K. and used by Australia-owned banks — will increase competition and help consumers get better deals.
“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,” he said. “They could also instruct their bank to share specific data with a financial adviser of their choice — meaning more tailored and timely advice.”
This month has seen the Central Bank of Saudi Arabia launch its open banking framework, which includes a set of legislation, regulatory guidelines and technical standards to allow banks and FinTechs to provide open banking services in the kingdom.
With that announcement, Saudi Arabia became the second country in the Gulf Cooperation Council (GCC) after Bahrain to implement an open banking framework. Meanwhile, the United Arab Emirates has granted an initial license to Tarabut Gateway while it prepares to roll out a formalized open banking framework.
Meanwhile, the head of the U.S. Consumer Financial Protection Bureau recently spoke of his agency’s plans to regulate open banking. CFPB Director Rohit Chopra said last month that this rule is “not explicitly an open banking or open finance rule, [but] will move us closer to it.”