In this FinTechNZ Viewpoint, James Brown shares his insights from the Commerce Commission’s Personal Banking Services Market Study Update.
In continuation of last month’s discussion on open banking developments, here is an update on the Commerce Commission’s market study into personal banking services. FinTechNZ has actively contributed to this investigation, which is now nearing the end of its feedback process.
Adoption and implementation: lessons from Revolut
Adam from Revolut shared valuable insights on the adoption of open banking in the United Kingdom (UK) and European countries. A key driver of their success was effective implementation. The UK and European experiences also show that establishing an oversight committee, funded by banks and including a broad mix of ecosystem participants was crucial.
Roadmap to operational open banking by 2026
This discussion focused on what a realistic roadmap to operational open banking in New Zealand may look like. Many felt that Payments NZ could be the right entity to lead this initiative. However, many agreed the roadmap needs to detail clear milestones and accountability to ensure timely progress.
Banks’ pace and customer centricity
Banks have progressed at varying speeds, potentially delaying competitors’ market entry. However, data from Revolut, for example, showed that banks benefit from adopting open banking by being compelled to prioritise customer needs. This competitive pressure is beneficial for consumers, driving innovation and improved services.
Urgency for action: learning from global leaders
We can no longer use the change in Government, new Ministers or the pandemic as excuses for delays. Currently, New Zealand lags significantly behind other parts of the world in open banking implementation. It’s crucial to clarify our desired outcomes and agree on a collaborative approach to achieve them.
Open source industry standards: a recommendation
An interesting suggestion from the chief architect for the Consumer Data Right (CDR) in Australia was to consider open source industry standards. This approach could facilitate a more inclusive and rapid development process, ensuring that all stakeholders can contribute to and benefit from the evolving ecosystem.
Moving forward
The feedback process for the Commerce Commission’s market study is a critical step toward shaping the future of personal banking services in New Zealand. The active involvement of industry participants, combined with insights from global experiences, provides a solid foundation for developing a robust framework.
FinTechNZ will continue to advocate for and contribute to these developments to ensure that our community’s voice is heard. Stay tuned for further updates as we approach the presentation of recommendations in October.
