What Open Banking Means for New Zealand

What Open Banking Means for New Zealand

Earlier this month, the New Zealand Government announced that open banking is coming to the island nation1 . This much-needed update is the first step in unlocking a more vibrant and competitive financial ecosystem for Kiwis.

Open banking is facilitated through a consumer data right (CDR) framework, a mechanism for safely and securely sharing personal data between different service providers2. It means Kiwis will be more easily able to compare mortgage rates and other banking products.

But the real opportunity for New Zealand lies in applying the principles of open banking to other industries. Finance, internet, energy, electricity, and other core services could also be easily compared and accessed using a CDR. And with the appropriate permissions, open banking could even switch service providers on behalf of consumers at the touch of a button.

The introduction of open banking to New Zealand will foster further innovation and increase competition. Businesses can be more creative and everyday Kiwis will be able to benefit with a broader suite of products available to them. The FinTech industry has played a major role in enabling open banking across the world. With extensive experience and a portfolio of ready-to-go solutions, Envestnet® | Yodlee® can help power this change. Here’s how:

  1. Reducing home loan applications from weeks to minutes
    The mortgage industry isn’t known for being fast. Manual processes and extensive human assessment leads to unnecessarily high-intest rates and application times. But non-bank lender, Tic:Toc, through digitising the lending experience from end-to-end, offers customers a home loan in under an hour.

    Using its Australian Accredited Data Recipient status, Tic:Toc is able to instantly and able to connect to its customer’s bank account. It then applies its AI-driven lending and data enrichment technology, alongside Envestnet | Yodlee’s data aggregation technology, to generate a customer’s financial commitments in real-time, empowering assessors and users to make more accurate and efficient credit decisions.
  2. Turning spare change into lifetime savings
    Investing hasn’t always been for everyone. A lack of financial capital and knowledge has meant it’s previously been restricted to the elite. But mobile investment platform, Raiz, alongside a slew of other start-ups, has changed the game. In early 2016, Raiz pioneered automatic micro-investing for Australians by enabling consumers to invest spare change into a diversified portfolio.

    Using Envestnet | Yodlee’s financial data aggregation capabilities, Raiz rounds up each purchase to the next dollar, and invests the leftover cents in investment funds. Using the consumer-permissioned data and enrichment that we provide has triggered further product developments for Raiz, such as My Finances, which tracks a consumers’ spending habits and offers important insights.
  3. Reimagining the checkout experience
    Consumers and merchants have come to accept the expensive tollbooth sitting in the middle of payments: card networks. But digital payments platform, GrailPay has developed a solution to bypass the card networks, and enable shoppers to pay directly from their bank accounts. This saves merchants over 75% on payment processing costs while also providing a more seamless onboarding experience for their consumers.

    To do so, GailPay needed a quick and secure way to link to consumers’ bank accounts and instantly verify their identity. They partnered with us to partner with us after comparing financial data aggregators, because of our quality of service and attention to the customer.


1Beehive, 2022

2MBIE, 2022