Errol Fonseca asks who will lead and who will lag with open banking set to ramp up in New Zealand

By Errol Fonseca*

New Zealand’s financial system is about to be shaken like never before. In just over a year, the data banks have guarded for decades will no longer belong solely to them. With the Customer and Product Data Act now in place and draft regulations under consultation, open banking will become a reality when the four major banks i.e. ANZ, ASB, BNZ, and Westpac are required to go live on December 1.

This isn’t just another compliance exercise. It’s a power shift. For customers, it means taking control of their own financial data. For fintechs, it’s a wide-open field to innovate. For banks, it’s a stark choice: lead with openness and build trust, or lag behind and risk irrelevance.

What open banking really means

At its core, open banking is simple: your data belongs to you, not your bank. It gives customers the right to share their financial information securely with accredited third parties via standardised APIs (Application Programming Interfaces).

That might mean linking a budgeting app to see your real-time account balances, or allowing a mortgage broker to instantly verify your income and expenses. It’s designed to make life easier, faster, and more transparent.

Crucially, there is no central data warehouse. Customer information remains with the bank, the “data holder”, and is only shared when a customer explicitly consents. This federated model avoids the risks of a single, hackable database.

Two types of data are in play:

 Customer data : account details, balances, and transaction history.

 Product data : general information like fees, interest rates, and product terms, published openly for comparison.

Consent is the golden rule. Customers decide who gets access, what data is shared, and for how long.

Consent can be revoked at any time.

Why it matters now 

New Zealand has been a late mover. The United Kingdom, European Union, and Australia all embraced open banking years ago, and their fintech sectors are already reshaping how people borrow, spend, and save.

Here, progress has been slow. Voluntary API standards developed by Payments NZ nudged the industry forward, but without legal force adoption remained patchy. That changes now. The 2025 Act gives regulators the mandate to enforce compliance, accredit third parties, and penalise breaches. For the first time, the system has teeth.

Being late isn’t all bad. New Zealand has the chance to leapfrog mistakes made overseas. If the rollout is designed well, with seamless customer journeys, fair access costs, and strong security, the country can move from laggard to leader.

Who benefits 

If implemented properly, open banking creates a three-sided win.

For customers, the shift empowers individuals and businesses to shop around with confidence. Budgeting tools can categorise spending automatically. Loan offers can be compared instantly against verified data. Mortgages, car loans, and small business credit can be approved faster, with less paperwork and fewer delays.

For fintechs, the innovation opportunity is immense.

 Akahu already provides open-finance infrastructure in New Zealand, enabling secure account data access and payment initiation via APIs.

 BlinkPay—now part of BNZ—is deploying real-time account-to-account payments using open-banking connections.

 Qippay is developing open-banking payments and embedded solutions in NZ.

 WeMoney offers a financial-wellness app with credit-health tools and consumer data right-based data access in Australia, and it also operates in NZ.

 Xero already supports open-banking-powered payment options (e.g., Blink PayNow on NZ invoices), positioning it to integrate regulated data feeds for SME cash-flow and reconciliation.

 Revolut has launched in New Zealand and applied for a local banking licence. Given its payments, foreign exchange, and credit offerings in Europe and Australia, it is well-placed to expand services here as the regime matures.

For banks, this is a test of mindset. They can treat open banking as a burden and comply grudgingly, or they can see it as a platform to regain trust. By partnering with fintechs, offering personalised services, and monetising new API-enabled capabilities, banks can cement their role as trusted custodians of data.

But if they resist, they risk being reduced to utility pipes while nimbler players take the customer relationship.

The lending question

Lending is where open banking could deliver the most immediate impact.

 Credit assessments can move from clunky PDF statements to real-time, verified data feeds.

 Personal finance platforms can build smarter credit scores, giving borrowers fairer rates and alternatives to payday lenders.

 Small businesses can access working capital faster, with accounting platforms like Xero feeding live cashflow data into loan applications.

 Buy now pay later providers can design more sustainable models, embedding transparency into digital wallets and retail platforms.

Fintechs won’t always hold loans on their own balance sheets. Many will act as enablers for banks, credit unions, and wholesale lenders. But the result will be the same: faster approvals, sharper pricing, and more competitive lending for New Zealanders.

The risks

The opportunity is huge — but so are the risks.

 Poor regulation: The rules are still in draft. If they overburden smaller players or let banks charge excessive API fees, innovation could be stifled.

 Tight timelines: Less than 18 months is aggressive for full implementation. Slippage is possible.

 Security failures: One breach could destroy public trust and set the system back years.

 Compliance mindset: If banks do only the bare minimum, customers won’t see the benefits, and the whole exercise risks irrelevance.

 Customer awareness: Most New Zealanders don’t yet know what open banking is. Without education and trust, adoption will lag.

Lessons from abroad

New Zealand has an advantage: it can learn from others.

 UK/EU: Open banking created thousands of fintechs, but clunky consent processes slowed adoption. Lesson: make the customer journey seamless.

 Australia: The Consumer Data Right began with banking but now extends to energy and telecommunications. Lesson: think beyond finance early.

 Singapore: Took a collaborative approach, with banks and fintechs co-designing API standards. Lesson: partnership beats confrontation.

Beyond banking

Open banking is only the beginning. The true destination is consumer data rights, giving people control of data across sectors.

Imagine switching your energy provider with one click, because your usage data is portable. Imagine your telco plan auto-adjusting to your actual usage. Imagine a trusted platform pulling in your financial, energy, and telco data to create a real-time “digital twin” of your household economy.

That’s where this is heading. Open banking is just the first chapter.

A call to action

December 2025 isn’t just a compliance deadline. It’s a line in the sand.

- For customers, it’s a chance to finally take control.

- For fintechs, it’s an invitation to innovate.

- For banks, it’s a test of courage: embrace openness and lead, or cling to the old model and fall behind.

- For regulators, it’s a responsibility to get the balance right, tough enough to build trust, flexible enough to fuel innovation.

Those who move first will shape the future of finance in Aotearoa. Those who lag will watch it happen without them.

The law is here. The date is set. The question now is simple: who will lead, and who will lag?

*Errol Fonseca is the founder of 4NSECA Consultancy Ltd.