Policy Statement

Minister of Commerce and Consumer affairs David Clark announced on 10 November 2022 that banks will be the first sector in New Zealand to implement a consumer data right framework (‘CDR’) also known as open banking.

This follows on from a 2020 MBIE discussion paper with options for implementing a CDR in New Zealand and the Government’s decision last July to establish a CDR in New Zealand. Implementing open banking in New Zealand is expected to take up to two years. Other sectors, including financial services, telecommunications, insurance, energy, and health, may be considered in future.

Unlike other OECD countries such as Australia and England, New Zealand has no legislative or regulatory framework for open banking. Our current open banking practices stem from Payment NZ Limited’s API Centre, an industry-led initiative.

What is a CDR?

A CDR is a mechanism that allows consumers to share their data freely and securely, held by one person, with a trusted third party, using standardised data formats and interfaces. In a banking context, banks will be required to share customer information if requested by the customer.

The expectation is open banking will help the New Zealand banking sector be more competitive – allowing customers to more easily compare mortgage rates, apply for loans and switch banks.  As David Clark emphasised “open banking allows customers to shop around for better deals. That means banks will also have to work harder to retain their customers, leading to savings for consumers.”

Open banking in Australia

In Australia, comparable consumer data right rules have been in place since February 2020 – these apply to the banking sector, with roll-out currently happening in the energy sector. The telecommunications sector is expected to follow next.

Under these rules, bank customers can ask their bank to share certain consumer data, such as data for deposit and transaction accounts, credit and debit cards, home loans and personal loans, and overdrafts and business finance, with third party recipients. Data can only be shared with recipients who are accredited by the Australian Competition and Consumer Commission.

What's next?

The Government’s next step is an engagement and consultation round, with an exposure draft of legislation to be released. We will provide an update on this once it is released. The scope of data that can be shared, and how we ensure consumer data is kept secure and private, are key aspects we will be interested in.

See links below for more information:

• For more information on CDRs generally, please see MBIE’s page, which can be found here.
• David Clark’s announcement can be found here.

Start a conversation

If you would like a briefing on any aspect of, or have any questions in relation to this Alert, please contact Liz Lim on +64 9 909 6341, Catriona Grover on +64 4 498 0816, David Ireland on +64 4 498 0840, or email the team at bankingandfinancialmarkets.nz@dentons.com.

This alert was co-authored by Oscar van der Laan, a solicitor in our Banking and Financial Services team.