The Promise and Progress of Open Banking in New Zealand

As New Zealand navigates the evolving landscape of open banking, industry leaders and fintech innovators are actively shaping the future of financial services.

Yesterday, Payments NZ hosted the Open Banking Showcase, organised by the API Centre ahead of a key implementation date, which highlighted the potential and challenges of rolling out open banking, emphasising a collaborative approach between industry and regulation. Held in Tāmaki Makaurau and livestreamed as part of Techweek24, the event featured fintech businesses and banks partnering to deliver innovative open banking payments.

Setting the Stage for Open Banking

Phil Cass outlined New Zealand's current stance, emphasising an industry-led initiative with a goal to create a hybrid industry/regulatory approach. Payments NZ supports this model, advocating for the right kind of regulation that complements the industry-developed standards. The goal of the API Centre, as he noted, is to strengthen the financial ecosystem, ensuring robust and secure integrations.

Fintech Innovations Driving Change

Several fintech leaders shared their visions and contributions towards enhancing the payments landscape in New Zealand:

• Adrian Smith from BlinkPay aims to revolutionise payment flows through technology, addressing the need for faster and more efficient transactions. A notable statistic shared by Smith revealed that over 23% of customers cited a lack of support from payment providers as a major issue when problems arise. BlinkPay showcased its integration with Sharesies for instant top-ups from customers’ bank accounts.
• Ashley Lake-Johns from Qippay highlighted the demand for alternative payment options in New Zealand, noting that high transaction costs often burden consumers. Lake-Johns emphasised financial inclusion as a core focus, aiming to provide more affordable and accessible payment solutions. Qippay’s open banking solutions enable merchants to offer customers convenient online payments.
• James McCann from Volley , drawing from his experience at Monzo in the UK, discussed the potential of implementing a "pay by bank" system in New Zealand. Volley envisions using QR codes for seamless payments, integrating directly with banks.
• Simon Adams from Worldline described their established use of online EFTPOS, which avoids screen scraping, thus providing a more secure and trusted setup for future services. Worldline’s Online EFTPOS product is live with more than 500 merchants and has been used by around 700,000 New Zealanders.

Industry Insights on the Open Banking Milestone

Lisa Ibarra facilitated a panel and asked about the upcoming milestone of open banking.

• Jody Bullen from 澳新银行 pointed out that significant groundwork has already been laid, with the establishment of the payment initiation standard achieved without regulatory intervention. This sets a strong foundation for further advancements.
• James McCann emphasised the creation of systems and standards that enable new startups to effectively partner with major banks, fostering innovation and collaboration.
• Jonathon Dale from Bank of New Zealand stressed the importance of collective adoption by all banks to truly benefit end users. While initial uptake might be slow, he expects a significant ramp-up over time.

Learning from Global Examples

Drawing on lessons from the UK and Australia, New Zealand aims to adopt best practices while tailoring them to local needs:

• Adrian Smith emphasised showcasing current work and partnerships to inspire the broader ecosystem.
• Jody Bullen reiterated the importance of collaboration, learning from international experiences to create optimal regulatory and operational frameworks in New Zealand.
• James McCann and Jonathon Dale discussed the need for strong trust frameworks and systems, citing successful regulatory models like PSD2 in the UK as benchmarks for New Zealand.

Future Directions and the Path Forward

As New Zealand approaches the November deadline for account information readiness, the focus remains on building trust and ensuring robust systems:

• James McCann and Adrian Smith underscored the necessity of consent and trust in the success of open banking.
• Jonathon Dale highlighted the importance of understanding customer needs to develop valuable products and solutions.

Emphasizing Partnerships and Standards

The second panel discussion centered around third-party partnerships and the integration of standards:

• Ashley Lake-Johns called for continuous dialogue with regulators and collaborative efforts to refine standards.
• Russell Jones (he/him) from Westpac and Micheal Maclean from ASB Bank discussed the importance of aligning open banking standards with digital identity, accreditation, and consumer data regulations, despite the complex landscape.
• Jo Phillips from Worldline identified significant opportunities to enhance services for businesses through the possibilities offered by open banking.

The rollout of open banking in New Zealand holds immense potential to transform the financial sector, making it more inclusive, efficient, and innovative. By fostering strong partnerships, learning from global examples, and ensuring robust regulatory frameworks, New Zealand is poised to lead the way in creating a dynamic and secure open banking environment. As we move forward, the collaboration between industry and regulators will be crucial in unlocking the full benefits of open banking for all stakeholders.

Yesterdays Open Banking Showcase highlighted the progress made and the exciting future ahead. With more than 500 participants joining in-person and online, the event underscored the broad interest and commitment to advancing open banking in New Zealand.

As Phil Cass noted in his opening remarks, this moment marks the beginning of the digital economy in Aotearoa, heralding a new era of financial innovation and collaboration.

Congratulations on a successful and engaging event. Adrian Smith BlinkPay Ashley Lake-Johns Qippay James McCann Simon Adams ANZ Worldline Payment Solutions Jody Bullen ASB Bank Micheal Maclean Bank of New Zealand Jonathon Dale Westpac New Zealand Russell Jones (he/him) Jo Phillips Steve Wiggins Jane-Renee Retimana Lisa Ibarra Vanessa Ronan-Pearce Andrew Dodd Natalie Vaughan-Sanders Piers Bragg Angela Gill Nigel Somerfield Matthew Bell

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