Open banking – the Kiwi way

We were thrilled to be part of last week’s Techweek 2022, where the Payments NZ API Centre ran a free webinar on the work we’re doing to lead Aotearoa New Zealand’s open banking future. We had a great deal of interest in the online event, with more than 350 people registering to listen to our speakers – Phil Cass, our API Centre Manager, Gavin Wong, API Centre Lead Architect and Jamie Leach, Chapter Lead at FDATA A&NZ. All our speakers came from strong open banking, open finance, and open data backgrounds.

Here we’ve summarised some of the key themes covered and you can watch the full webinar in the video below.

API standards govern safe and secure interactions

API Centre Lead Architect Gavin Wong explained that API standards govern the interaction between three players: the customer, the bank, and the third party who wants to access that customer’s data. While technically speaking you don’t need standards to offer APIs, having those standards ensure customer data can be accessed safely and securely and ultimately lead to more user trust in the open banking ecosystem.

From a technical standpoint, he said, any access to an API Provider’s resources and systems must be in an environment where all parties involved can be clearly identified, the communication channels must be secure and non-repudiable, and there are safeguards in place to prevent unintended or unauthorised release of data. Customer consent is also an important part of this environment, with consent able to be easily obtained, verified, and revoked by the customer as required. Standards govern all these functions enabling for ease of adoption, learning and iterating.

Open banking is only the first stage of the journey

Quoting Scott Farrell of King & Wood Mallesons in Australia, Jamie Leach, Chapter Lead at FDATA A&NZ said the first stage of Australia’s Consumer Data Right (CDR) is already helping Australians, but the journey has just begun. Open banking follows an evolutionary path, and she predicts that it will become an unstoppable force which has an impact on many parts of life.

Jamie gave us examples of a few uses cases that demonstrate this – one of a couple who needed a mortgage to finance their dream home, one of parents who were looking to place their child in a school, and another of someone looking to buy their dream car. In all these examples, open banking technology helped to enable more and better consumer choice and streamline administrative paperwork so the transactions could be processed more efficiently. We live in a digital world now, she said, and open banking is the start of consumers leveraging their data to create enhanced customer experiences. Customers don’t need to know how it works; they just need to trust that it will.

Aotearoa has the chance to get it right the first time

Gavin spoke about how the API Centre’s industry-led and developed API standards were technically based on the UK’s Open Banking Implementation Entity (OBIE) baseline standards, with adaptations for the local market and conditions. This has allowed for standards to be delivered quickly and efficiently. The market-driven nature of open banking in Aotearoa has also enabled the right-sized framework and governance structures to be put in place. The upcoming Consumer Data Right (CDR), he said, will help encourage further adoption of the centre’s standards and grow the open banking ecosystem.

Jamie talked about how the government’s plan to introduce a CDR in Aotearoa soon provided an opportunity for the country to take lessons from Australia, whose CDR became overly-prescriptive due to the lack of a robust framework around consumer privacy. She had confidence that Aotearoa will now have a chance to get it right by taking lessons from other jurisdictions, particularly Australia, and design a CDR that will get it right the first time, she said.

Thank you to all who attended

Thank you to everyone who registered for and attended our webinar. You can watch the full recording below as well as download the presentation. If you have any questions or would like to find out more about getting involved with the API Centre, you can contact the team at [email protected]