‘Open banking’ push to go on, Faafoi vows
Commerce and Consumer Affairs Minister Kris Faafoi is picking up the ‘‘open banking’’ project where National’s Jacqui Dean left off.
Former commerce minister Dean set a deadline of April for the banking industry to demonstrate progress in the Payments Direction project, which could facilitate a banking revolution.
Faafoi said he expected that report to now be made to him.
Open banking is the term for a tech-driven revolution which countries like the UK and Australia believe could cut the cost of banking.
It involves clever tech companies building money management and payment apps and services better geared to
"Anyone being overly obstructive may find themselves being left in the dust." Commerce and Consumer Affairs Minister Kris Faafoi
modern consumer needs than banks currently offer.
But for open banking to happen in an orderly way, those tech companies need secure, real-time systems (known as APIs, or Application Interface Platforms) by which they can retrieve customer data from the banks, something UK and EU authorities have done through legislation and regulation.
The Payments Direction project is being run by Payments NZ, which is owned by the banks and is the guardian of the payments system. It is seeking common APIs to enable things like customer data retrieval, and initiating payments, which Dean said was ‘‘vital’’ to enable payments innovation to happen in New Zealand.
‘‘We are keen to talk to Payments NZ once we get the report back, and engage with the banks as well,’’ Faafoi said.
He hoped the industry could lead development of open banking APIs, continuing the industry-led, regulation-lite development of the New Zealand payments system.
But Faafoi said: ‘‘Anyone being overly obstructive may find themselves being left in the dust.’’
Payments NZ chief executive Steve Wiggins planned to report to Faafoi before Dean’s deadline.