The New Zealand government will make banking the first sector it applies its consumer data right (CDR) framework to, paving the way for open banking.

“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,” the country’s Minister of Commerce and Consumer Affairs David Clark said.

Clark said open banking was “a fixture” of the UK banking system and “a commonplace tool used overseas”. And he pointed out that “The businesses and services wishing to receive this data would have to meet a number of safeguards to ensure the information could be handled safely and securely.”

Promote competition

The minister was keen to stress the move was intended to promote competition that would benefit consumers, and the measure comes days after Prime Minister Jacinda Ahern questioned whether the “significant profits” drawn by the countries banks were examples of “the right way to behave”.

She said: “It doesn’t always take government intervention for that kind of self-reflection to occur. It’s time the banks operating in New Zealand did that very thing.”

Clark said the banking sector “is a natural starting point for rolling out consumer data rights and spoke positively about banks in the country that “have proactively started building the infrastructure to facilitate a CDR”.