Open Banking 

Open Banking is about empowering consumers and businesses to make better, more informed financial decisions, whilst fostering competition and choice.

Fundamental to Open Banking is consent – giving customers control over who can access their financial data, when and for what purposes.​ It enables consumers to securely share their financial data with third parties and to authorise third parties to make payments on their behalf.

The impact on the banking sector has been significant, with the introduction of new innovative financial services and a dramatic reduction in unnecessary paperwork, in addition to the introduction of cheaper, alternative payment mechanisms.

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Underpinning Open Banking are some common business protocols and a set of highly secure, standardised Application Programming Interfaces (APIs) which, together, define the framework for how banks and other organisations interact on both a business and technical level, whilst ensuring safety and privacy for everyone. Banks and third party organisations must follow these protocols and standards to participate in the Open Banking ecosystem. Together, these common protocols and API standards should drive security, trust and adoption by all parties – financial institutions, fintechs and customers.

New Zealand made significant progress towards this standardisation with the industry-led development of the Payments NZ API Centre API standards and business protocols (e.g. best practices, guidelines, templates, etc). The major banks launched their first Open Banking APIs in 2024. The introduction of a Consumer Data Right (CDR) for the banking sector establishes a legal framework for Open Banking and, as the Consumer Data Right is extended beyond the banking sector, will unlock incredible potential within and across different industry sectors - this is Open Everything. The vision is to, literally, open everything, spanning both private to public sector organisations, such as energy, health and government services.