New Zealand: Open Banking the Kiwi way

Over the past few years, New Zealand has pioneered a distinctive path in Open Banking and broader Open Finance, embracing an industry‑led approach rather than regulatory compulsion. Through collaboration between banks, Fintechs, regulators, and Payments NZ’s API Centre, the country is forging a secure, scalable, and cost‑effective system aimed at empowering consumers and fostering innovation.

How it started

Open Banking in New Zealand actually began as an industry-led initiative rather than a purely regulatory mandate. In 2019, Payments NZ launched the API Centre, bringing together banks, fintechs, and industry stakeholders to co-develop common API standards. This collaborative approach allowed early testing of Account Information and Payment Initiation APIs through pilot programs, laying the groundwork for broader adoption.

The government later strengthened the framework with the Consumer Data Right (CDR) legislation, ensuring that by 2025–2026, secure data sharing would be mandatory for the major banks, while keeping implementation costs lower compared to fully top-down regulatory models overseas.

Timeline

• 2017 – Government Discussion Paper on Data Portability: The idea of a Consumer Data Right (CDR) is first floated in a government discussion paper, inspired by Australia’s early moves.
• 2018 – Payments NZ Begins Industry-Led API Work: Payments NZ forms its API Centre, kicking off collaborative work between banks, Fintechs, and other stakeholders to develop open banking standards.
• 2019 – API Centre Sandbox: Launch of sandbox to let ecosystem players test early versions of API standards in a safe, non-production environment.
• 2021 – First Production APIs Live: BNZ and Westpac begin using Account Information and Payment Initiation APIs with select partners, marking the first real-world use of open banking in NZ.
• November 2022 – Commerce Commission Consultation on API Rules: The Commerce Commission opens a review into Payments NZ’s standard-setting role and competition issues within the banking sector.
• August 2023 – Māori Data Guidelines Published: Payments NZ releases Ngā Tohu Ārahi (Māori Data Handling Guidelines), embedding indigenous principles into the Open Banking framework.
• November 2024 – Account Information API v2.1 Goes Live: Four major banks—ANZ, ASB, BNZ, and Westpac—implement Account Information API v2.1, enabling secure third-party access to customer data.
• May 2025 – Payment Initiation API v2.3 Launched: the four banks (see above) launch v2.3 of the Payment Initiation API, supporting recurring payments, decoupled authentication, and improved payment experiences.
• Mid-2026: Kiwibank is slated to join under both standards

New Zealand market specifics

Emerging Use Cases & Key Ecosystem Players

Since 2019, Payments NZ’s API Centre has operated in close consultation with banks, Fintechs, Ministry of Business, Innovation and Employment (MBIE), Māori data experts, and consumers under a trust‑based, co‑design model. Over six years they developed 25 API standards, engaged 1,100+ sandbox users, and facilitated 235 unique applications and 13.7 million test calls—all for just NZD 13.77 million in total investment.
A key strength of the model: embedding Māori data sovereignty principles within new Data Handling Guidelines (Ngā Tohu Ārahi), ensuring integrity and cultural inclusion in data practices.

According to the 2024 FinTechNZ ecosystem report, 58% of participants are Fintechs and third‑party providers, with 64% of them small‑scale innovators. Use cases currently skew toward payment applications (23%), ahead of lending and investment tools.

Players such as Qippay (payment solutions), Volley (financial automation), and WeMoney (personal finance management) are already leveraging open APIs to deliver value. Typical use cases include real-time budgeting tools, personalized lending products, automated accounting for SMEs, and seamless merchant payments without card rails. These innovations are designed to boost competition, lower costs, and give consumers more control over their financial data—aligning with the government’s aim to energize the banking sector and improve customer outcomes by 2026.

Why the Kiwi Approach Matters

• Cost efficiency: NZ spent about NZD 13.8 million over six years—just 5 % of Australia’s or 4 % of the UK’s comparable investments—while building a production-ready ecosystem.
• Collaboration over coercion: Instead of waiting for legislation, industry stakeholders built standards and sandbox tools in tandem, reaching major bank compliance ahead of schedule.
• Cultural inclusion: Embedding Māori data sovereignty principles into data handling guidelines ensures open finance aligns with Aotearoa’s (the Māori name for New Zealand) values.

Challenges & What’s Next

1. Dominance of major banks: As noted by the Commerce Commission, limited competition among the four major banks has slowed disruption—Open Banking aims to change that by 2026.
2. Fintech readiness lag: While APIs are live, many third parties (e.g. budgeting apps) have yet to launch mature integrations. Akahu, a popular Fintech, still used unofficial credential‑scraping until they migrated to official APIs.
3. Rolling out Consumer Data Right: Transitioning from voluntary standards to a regulated data right framework is underway, with full compliance expected by late 2025 / early 2026.

While Open Banking today focuses on payments and account information, the Customer and Product Data Act envisions Open Finance across sectors—including insurance, utilities, investments, and consumer products. This opens pathways to future innovation across identity verification, switching services, and AI‑powered financial advice services.

New Zealand’s Open Banking journey is characterized by an industry‑led, co‑designed ecosystem built for trust, cost-effectiveness, and cultural alignment. With major banks compliant, growing Fintech adoption, and new legislation (CDR) on the horizon, the country is well-positioned for Open Finance expansion. As third-party services mature and regulation takes effect through 2026, consumers can expect more innovative, competitive, and transparent financial services ahead.

Sources:

• https://www.paymentsnz.co.nz/resources/articles/a-third-major-milestone-in-open-banking-for-aotearoa-new-zealand

• https://www.interest.co.nz/technology/131184/fintechs-could-be-stymied-costly-and-differing-access-open-banking-application

• https://securitybrief.co.nz/story/open-banking-in-new-zealand-advances-with-nzd-13-77m-spent

• https://fintechnz.org.nz/knowledgehub/aotearoa-new-zealand-open-banking-ecosystem-map-report-2024/

• https://ecommercenews.co.nz/story/open-banking-boosted-in-new-zealand-as-major-banks-upgrade-api

• https://www.reuters.com/business/finance/limited-competition-personal-banking-services-new-zealand-report-says-2024-03-21