Clark announces banks will be first designated for 'consumer data framework' to allow easy shifting of data and accounts, but implementation still 'two years away'

Minister of Commerce and Consumer Affairs David Clark has announced a move towards open banking that would allow customers to shift their data and accounts more easily between banks, but he said the implementation was still at least two years away.

Last July, the Government agreed to establish a consumer data right framework (CDR) which would require data holders like banks to allow customers to more easily move accounts.

“Open banking ensures banks must share customer information if they request it, making it easier for New Zealanders to compare mortgage rates, apply for loans and switch banks,” Clark said.

“Open banking is a requirement on the Australian owned banks’ parent companies across the ditch and is a fixture of the banking system in the UK. It’s a common place tool used overseas to increase competition and make it easier for customers to get better deals," he said.

“Under open banking if somebody wanted to re-fix their mortgage at a lower interest rate, they could ask their bank to securely share transaction information, with a competitor. They could also instruct their bank to share specific data with a financial adviser of their choice – meaning more tailored and timely advice.“

Clark said banking was a natural starting point for rolling out CDR.

"Banking was also the first sector designated in Australia so we can learn from them. I am also aware some banks here have proactively started building the infrastructure to facilitate a CDR,” he said.

Clark's news release also included notes saying that other sectors including financial services, telecommunications, insurance, energy, and health may be considered for CDR designation.

"The next step will be engagement and consultation, which will include the release of an exposure draft of legislation. It’s anticipated the work to implement open banking will take up to two years to introduce," Clark's office wrote.