Source: New Zealand Government
Greater competition and lower prices for Kiwi consumers are a step closer today as consultation begins on ‘open banking’ and ‘open electricity’ Commerce and Consumer Affairs Minister Andrew Bayly and Energy Minister Simeon Brown say.
“Every New Zealander relies on banking and electricity – these are foundational services for our lives and our wellbeing, but also for our economy,” Mr Bayly says.
“However, at the moment, banks and electricity companies are operating inside a walled garden. Both sectors are dominated by a handful of large, profitable companies that face little competition. New entrants face high barriers to entry and as a result consumers do not benefit from innovative new products and services.
“As part of the Government’s ambitious agenda to drive better competition, we are supporting the roll out of open banking and open electricity which will better level the playing field between established companies and start-ups.
“The first step was the introduction of the Customer and Product Data Bill which establishes an economy-wide legislative framework for secure data sharing. The next step, which we are progressing at pace, is the development of regulations which will create the rules for how a consumer data regime will work for different sectors.
“The first cab off the rank is banking and we are seeking feedback about the development of regulations, with a view of ‘open banking’ being operational by the end of 2025 – well before the target set by the recent Commerce Commission banking market study.
“Simultaneously, we are seeking feedback on how a consumer data regime could be established for the electricity sector. In time, the intention is to also apply it to other sectors like insurance and telecommunications.”
Mr Brown emphasised the potential for open electricity to lower costs for households and businesses.
“Consumer NZ recently found that Kiwis saved an average of $524 per year by changing their electricity provider. But despite acute cost-of-living pressure, only 10 per cent of households changed providers in the last 12 months.
“This tells us that the barriers for comparing plans and switching providers are too high. Under existing rules consumers can request access to their electricity consumption data for free up to four times a year and retailers must provide that information within five working days. In a modern, digital, on-demand economy, this cumbersome process is totally out of touch.
“Open electricity empowers consumers by making their electricity usage data more accessible, meaning consumers can better understand their unique needs and choose a plan that best suits their needs. It also reduces electricity companies’ ability to hide behind slick-sounding promotional campaigns and enables new entrants to compete by offering customers bespoke packages and new products like rooftop solar.”
