New Zealand banks ASB, BNZ and Westpac have signed up to trial programmes that allow Open Banking. The banks are partnering up with Kiwi fintechs, Datacom, Paymark and Trade Me to test pre-payment checks for transactions.
Application Programming Interface (API) technology is also undergoing development to allow third-parties to liaise directly with banks to authorise the retrieval of account information. If successful, payments can be made online without using credit or debit cards.
Steve Wiggins, CEO of Payments NZ noted that “the ultimate aim is to have a shared API framework and agreed specifications for a range of common APIs that will contribute to the aspiration of a progressive payments ecosystem”.
The pilot scheme is expected to end late this year. New timeframes regarding the standardisation and regulation of API is expected in the post-pilot period.
Australian groups are eagerly monitoring New Zealand’s scheme. Currently Canberra has set out a blueprint plan for introducing open banking. Recommendations were made to consumer groups, the Financial Rights Legal Centre and Consumer Action Legal Centre to Australia’s Treasury, advising certain protections.
Hot on the trail of the Facebook-Cambridge Analytica controversy, the two consumer groups warn of possible abuse of data without assurance that regulation will ensure security is paramount. They argue strongly for a consumer ‘right to deletion’.
"If consumers are to have confidence in the open banking regime, this distils down to the need to having control over their own data and to know that if they withdraw consent at any time that data will be deleted,” the groups issued in a joint statement.
Joining the UK and the EU, the establishing of open banking regimes in New Zealand and Australia are likely to set industry and regulation trends. When other countries begin their own schemes, pilots like New Zealand will likely be emulated as they seek out best practises within the sector.
Interested in New Zealand fintech trends? Join us at the AltFi Australasia Summit 2018 on 16th April in Sydney. Hear from our panellists, Garth Stanish of the Financial Markets Authority,Greg Symons, COO of SocietyOne and Neil Roberts, CEO of Harmoney, who will be discussing New Zealand’s fintech lending. Register now for Early Bird tickets.