The way we bank in NZ is about to change forever. Here’s what you’ll soon be able to do

Tuesday, 2 December 2025

Banking and financial services in New Zealand have long been defined by silos.

You might have your mortgage with one bank, your KiwiSaver with another provider and a credit card with a different provider.

The information about each of those accounts has been kept separate, with no unified visibility about what’s going on.

Throw in your various insurance policies, which again could be spread across providers, and you fundamentally have a mess of spreadsheets floating across the internet, each sitting in a different app or website.

Open banking is looking to change that.

Regulations went into effect this week that essentially bring open banking to life in New Zealand in the hope that the benefits and innovation seen elsewhere will also come to fruition locally.

In announcing the regulatory shift, Commerce and Consumer Affairs Minister Scott Simpson outlined a range of advantages that we’ll be able to derive from the initiative.

This includes making it easier to switch banks, providing better access to budgeting insights and improving our ability to compare mortgages between different organisations.

Under the regulations, ANZ, ASB, BNZ, and Westpac were required to have certain open banking systems ready by December to ensure open banking could be brought to life as quickly as possible.

But how will this all actually work? And what will we actually be able to do once open banking kicks into gear?

How open banking works

Open banking is all about data. That sounds esoteric and a little dull, but it fundamentally comes down to who controls the data your bank holds on you. This includes your account balances, your mortgage details, your KiwiSaver fund and your credit card debt.

Historically, the bank or financial institution holding your account would keep this data tightly locked up and not give anyone else access to it. This made it difficult to switch and also to mix and match products across different providers.

Ben Lynch, the founder of open finance company Akahu, tells me that open banking changes this dynamic in that it gives you control.

“Open banking is essentially the idea that you, as a consumer or a business, own the data the banks hold about you,” Lynch says.

“And then if you want to connect that data to other products other than your bank, that's your right, and the banks have to provide a safe, secure way for that to happen.”

The security in the system is built into the fact that the banks have developed the infrastructure to keep the data sharing secure, while the Government has created a system whereby only accredited organisations will have access to the information.

You, as the customer, will retain complete control over who you decide to share the information with. The bank will not unlock that magic box unless you give them permission to do so.

“You will be able to log into your bank's app and then see all the access you've given and revoke it. You’re in complete control.”

But what does this actually mean in practice?

The simplest way to think about open banking is to imagine a situation where you open a single app, and you’re able to see all your information from a range of different providers (think banks, credit card companies and lending institutions). Everything in one place.

“You could ostensibly now have a personal loan with Westpac, and you could have that display inside your ANZ app, for instance,” says Lynch, pointing out that this will make everything simpler.

It also applies to credit cards. If you like the rewards scheme being offered by American Express, you could have those credit card details displayed in your banking app.

You’ll now have the options to pick and choose the products that most align with your needs, without the groan of having to lug everything across to a new provider.

'It really does become about best product wins,' says Lynch.

As these rules shift, you won’t necessarily even need to use your bank’s app anymore. Other providers, like Sharesies, who already have a decent app, could further develop their capabilities to make everything accessible in one place. They now have the incentive to innovate in ways that wouldn’t have been imaginable previously.

Sharesies has already been making moves in this direction through the preemptive launch of a debit card in conjunction with Mastercard, which offers a reward of $1 invested through your Sharesies account for every $100 spent.

Without open banking, this debit card would normally have to hang outside your banking app, a disembodied financial appendage removed from all your other accounts and details. But in the foreseeable future, it could be stitched into your banking app and give you a clearer view of what’s going on in your finances.

Scott Nixon, the general manager of Sharesies Personal, says this is only the start, and customers could expect further innovation now that the open banking settings have been put in place.

Competition will heat up

The open banking revolution could light a fire under the major banks to ensure they’re doing the best they can for their customers.

Lynch says it’s important to remember that this will go both ways for the big banks. They may be handing over their own customer information, but they will also get a glimpse at what customers at competing banks are doing.

Previously, if you were a Westpac customer with your mortgage sitting with ANZ, that information would be held separately. But now, if you consent to sharing, those mortgage details could become visible to the Westpac banking team.

“Westpac has the ability to offer me a targeted insight, knowing that maybe my home loan is rolling off next month, and I can give you a better rate,” says Lynch.

A complacent bank could now become much more vulnerable to competitors willing to respond to customer needs.

The enormous impact of open banking can already be seen in companies like Revolut, which has been described as one of the fastest growing banks in European history, largely due to the effectiveness of its app, which allows users to manage their finances across countries, currencies, banking providers and investment portals. It’s been dubbed a finance super app, a single key to all your financing needs.

This type of innovation is only possible when we have easy access to the available data.

But will it work in the long term?

Every expert spoken to for this piece agreed that these regulations are a positive step for the country, but there are some important things to keep an eye on.

Pernell Callaghan, the managing director at Finbase, says that open banking only works when the data is secure.

“The important caveat is that implementation matters,” he says.

“Data-sharing standards need to be secure, consistent, and actually usable. If done well, open banking will reduce friction for customers, lower the cost of switching, and improve the overall efficiency of the financial system. If done poorly, it risks adding compliance burden without real consumer benefit.”

Much of the security in the system is reliant on the infrastructure the banks have built – and this isn’t without complications.

Dean Anderson, the founder of Kernel Wealth, is also an avid supporter of the technology but says there are some interesting debates playing out in the banking sector abroad right now.

Financial services companies building their apps and interfaces on the promise of having free access to this data could be walk into trouble if the banks do eventually expect a return for all the investment they’ve put in.

“In the US, we’ve actually seen JPMorgan and others trying to challenge this in court by saying: ‘We're bearing this literal data and infrastructure cost, and we need to pass this on,” says Anderson.

Maintaining the secure data structure to make this work is enormously expensive, and the trust in the system is largely contingent on what the big banks are bringing to the table.

For now, New Zealand’s big banks are all on board with the open banking revolution, but the debates playing out abroad are important in terms of informing how things could evolve over time.

One thing that’s certain is that none of the big players will be able to sit on their hands as this change happens, because consumers will have more freedom of choice than we’ve ever had. And with choice comes the ability to choose the products we actually want rather than being held captive by the inertia imposed by the old refrain: ‘it’s just too hard to switch’.