From 1 December 2025 the four major banks (ANZ, ASB, BNZ and Westpac) are now mandated to support secure data sharing under the Customer and Product Data Act 2025. Kiwibank will need to be ready by June 2026 for payments, and December 2026 for other open banking services. All other banks and deposit-takers can opt in on a voluntarily basis at this stage.
This is open banking and marks a major milestone in financial innovation in New Zealand.
What is Open Banking?
Essentially open banking is a safe, regulated way to share their financial information.
More importantly open banking will accelerate innovation and enhance competition in the banking sector, creating opportunities for FinTech’s and smaller players to deliver services that traditional banks have been slow to offer.
It will allow FinTech’s to build cash management and budgeting tools, mortgage or savings comparison tool and low-cost payment options that can be used with any and all of the banks involved.
This means you will no longer be restricted by what the banks have created.
Imagine that you bank with ‘say’ ANZ and have your main transactional account with them, but you decided that the mortgage that Westpac offers is better. You then decide that you need a savings account and using the comparison tool you work out that that Kiwibank offer a better option. Not only can you view all the accounts on a single phone App, but you can set up automated transactions between different accounts at the different banks. You might set up a minimum limit on your ANZ transactional account so they if the balance drops below ‘say’ $500 then it would automatically be topped up from your Kiwibank savings.
As you start to consider the opportunities and innovations presented by open banking you might understand the benefits to all Kiwi’s.
It’s not new – open banking was first introduced in the UK back in 2017 (8-years ago) by the Competition and Markets Authority (CMA), following an investigation into retail banking. The UK banking sector was dominated by big, established banks, with a lack of difference in services – and this meant a reluctance by consumers to switch providers. This undermined the power of competition to drive improved service.
Sound familiar?
Today in the UK consumers can instruct their bank to allow third parties access to this information, where it can be analysed and pulled together in a user-friendly interface. This has prompted the development of a wide range of services that can help consumers better understand and manage their money. It’s working well in the UK and now Kiwis will get the benefits too.
Banks Have Resisted Open Banking
The banks in New Zealand have been very profitable, and that’s at the expense of their customers – you!
The Commerce Commission has found that New Zealand’s largest banks do not face strong competition, meaning that banks have been able to sustain high levels of profit despite low levels of innovation. The Commission states that in the medium to long-term, open banking “has the greatest potential to promote ongoing disruptive competition for personal banking services,” and the government agrees.
Kiwi Edition loves to provide good news, and the introduction of open banking is definitely going to good for Kiwi’s even if the banks are not so happy.
It’s another way that technology can be used to help us all enjoy a more prosperous life.
