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New Zealand Government kickstarts open banking

New Zealand Government kickstarts open banking

The New Zealand Government has instructed banks to begin sharing data with competitors under a new open banking framework.

Last July, the Government agreed to establish a consumer data right framework (CDR) which would require data holders like banks to ensure New Zealanders can gain access to a wider range of products and services that better meet their needs.

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."

He says the introduction of open banking should enable customers to shop around for better deals, meaning that banks will have to work harder to match the services offered by innovative providers.

“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.

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