NZ Fast-Tracks Open Banking Rollout to Boost Financial Choice by Christmas

Open banking refers to a regulatory framework that allows consumers to securely share their banking data with accredited third-party providers, such as fintech companies.

In a decisive move to modernize the financial sector and empower consumers, the New Zealand Government is fast-tracking the rollout of open banking, with full implementation targeted by December 1, 2025. Commerce and Consumer Affairs Minister Scott Simpson announced that the banking sector has officially been designated under the newly passed Customer and Product Data Act, laying the groundwork for sweeping changes in how financial data is shared and used across the country.

The legislation, part of the Government’s Quarter 1 Action Plan, aims to bolster competition across key industries—namely banking, energy, and telecommunications—by dismantling data monopolies and empowering consumers with greater control over their personal information. Open banking represents a critical first step in this strategy.

What Is Open Banking?

Open banking refers to a regulatory framework that allows consumers to securely share their banking data with accredited third-party providers, such as fintech companies. With the customer’s consent, these third parties can access bank account data to deliver new, often more consumer-friendly services. These include:

• Instant payment solutions

• Real-time loan comparisons

• Subscription management tools

• AI-driven budgeting and savings apps

• Simplified mortgage approvals

The model has already seen success in countries like the UK and Australia, where open banking is credited with fueling financial innovation, reducing processing times for services like home loans, and increasing transparency for consumers.

Implementation Timeline and Scope

Under the current plan:

• ANZ, ASB, BNZ, and Westpac, New Zealand’s "big four" banks, are required to have their open banking systems fully operational by 1 December 2025.

• Kiwibank has been granted a slightly extended timeline, with compliance expected by June 2026.

“This designation is not just a regulatory change—it’s a cultural shift in how financial services work,” Minister Simpson said. “We are making sure that the largest institutions open up their systems in ways that enhance consumer choice and stimulate innovation.”

The Strategic Vision Behind the Reform

Simpson underscored the Government's ambition to reshape market dynamics in banking by preventing dominant institutions from stifling competition. “Designating the banking sector is necessary to speed up the uptake of open banking in New Zealand. It will ensure the major banks are not creating unnecessary barriers for fintechs and smaller players,” he stated.

This shift is expected to pave the way for smaller, more agile technology-driven startups to enter the market and provide alternatives to traditional banking services. The Government sees this as a necessary antidote to rising costs and stagnating innovation in the sector.

Consumer-Centric Benefits

The ultimate beneficiaries of open banking, according to the Government, are everyday New Zealanders. From simplified processes to smarter digital tools, the reforms are poised to change how consumers interact with their finances.

For instance:

• In Australia, open banking has significantly shortened mortgage approval times.

• In the UK, customers benefit from apps that track recurring payments and cancel forgotten subscriptions, saving potentially hundreds of dollars annually.

• In Europe, budgeting apps connected to multiple bank accounts allow users to make real-time spending decisions based on predictive analytics.

“These are not distant possibilities,” Simpson affirmed. “These are realities we can achieve here in New Zealand.”

---

The Road Ahead: Regulatory and Industry Preparedness

While the benefits are considerable, the success of open banking hinges on tight regulation, robust cybersecurity, and clear consumer consent mechanisms. The Customer and Product Data Act outlines these safeguards in detail, providing clear expectations for data security, consent protocols, and interoperability between systems.

The Government will be closely monitoring the preparedness of the major banks, and Minister Simpson has issued a clear directive: “I expect the banks to be fully prepared so their customers can take advantage of open banking from day one.”

Industry players are already responding. Several fintech companies have expressed readiness to expand into the New Zealand market, drawn by the promise of a more open and consumer-centric banking environment.

A More Competitive Future for NZ

This initiative is part of the Government’s broader economic vision: boosting competition, lowering consumer costs, and enhancing digital transformation across sectors.

“We are leaving no stone unturned,” said Simpson. “Whether it's energy, telecommunications, or financial services, we are determined to level the playing field.”

With the December 1 deadline fast approaching, New Zealanders could find themselves entering the holiday season with unprecedented control over their financial choices—a shift that could mark the beginning of a new era in Kiwi banking.