Source: MakeLemonade.nz
Tamaki Makaurau – A fast growing number of Kiwis are climbing into open banking, without knowing it.
Their appetite for open banking, where consumers allow third-party providers to use the financial information held by their bank to inform new products, is taking off, FinTechNZ executive director Jason Roberts says.
Demand for and use of open banking services has been further expedited by the covid pandemic. To make open banking successful and sustainable, however, more banks need to embrace an end-to-end digital architecture.
Technology has facilitated a progressive opening up of the banking industry. It has ushered in an era of collaboration not just competition between incumbent banks and fintech, Roberts says.
“This creates big opportunities to make banking better, in particular, tailored, personalised solutions for every area of money management. including help for those with an unpredictable income in managing their finances and getting a mortgage.
“Consumers are now less likely to use branches or cash and more likely to embrace digital channels. This will become a lasting trend. Open banking will be the hot topic at the FinTechNZ hui taumata
event in Auckland on February 28.
“The fintech industry is awaiting government announcement on consumer data rights (CDR) with the likely expectation as seen overseas with banking.
“People will soon see a new banking as a service approach, where bank services or products appear embedded in processes, bill paying, a bit like going to a gas station where people buy on services, price and add value.
“Customers must see a clear benefit from sharing their data. This means differentiated, tailored products; it also means stable, reliable systems that are capable of handling steep increases in demand and delivering rapid service as open banking takes off.
“New Zealand will see more modern banking platforms capability using such as application programming interface or APIs.
“Financial APIs are the key to securely and efficiently exchanging consumer-permissioned data and are a catalyst for new innovations, revenue opportunities and integrations in the financial services industry driven by AI analytics.”
This allows data to be easily processable by third-party providers. If anyone has shopped online, made a restaurant reservation on their phone, ordered Uber eats, or booked a holiday through a travel portal, they most likely have used an API.
Such fundamental change will take time to fully evolve on a global scale, but there is no doubt the trend is speeding up even more so because of the coronavirus pandemic.
What Kiwis demand in the personalised service age of Netflix, Uber and Amazon is no different than what clients want from market infrastructures.
While it’s still early days in this journey, New Zealand firms will need to move fast in response to new regulatory mandates.
For further information contact Jason Roberts of 021 2227624 or NZTech’s media specialist, Make Lemonade editor-in-chief Kip Brook on 0275 0301898
