Big banks spend $100m on system designed to help their competitors

Wednesday, 10 June 2026

Major banks have spent tens of millions building an open banking ecosystem that actively invites new market competition.

Kiwibank has launched its open banking services ahead of schedule.

The infrastructure is live, boasting half a million daily transactions and instant account-to-account payments in under three seconds.

Analysis: Open banking has always been about the freedom to share the data we own with whomever we choose, but none of that works if the sharing of that information isn’t secure.

The onus to ensure that this information can be shared rests on the major banks, which currently hold that key customer information.

The process of sharing that hallowed information is now well and truly underway.

Across the Big Four, the open banking pipes are humming: Westpac and ASB have collectively integrated over 22 third-party apps, while ANZ has established links with eight core fintechs and BNZ is working with 30 tech providers.

Kiwibank also isn’t sitting still, partnering with innovative tech firms to bring this all to life ahead of schedule. All the major players are shifting open banking from the lab into the mainstream by making it easier to share information.

There’s still work to be done, but the plumbing behind open banking is well and truly established, which means we will see more functionality appear as the major banks look to gain an upper hand.

But this has all come at a major cost to the big banks.

Between them, ANZ ($40 million) and ASB ($30 million) have already spent north of $70 million to make this happen. When you factor in BNZ and Westpac, you’re already looking at an eyewatering $100 million being spent by New Zealand’s major banks to build the infrastructure that will directly lead to them facing more competition in the near future.

Our major banks are essentially footing a massive bill for an ecosystem designed to help their competitors get a better glimpse at the customers they’ve long held behind walled gardens.

“Current regulations prevent banks from recovering these costs through fees charged to third parties, who in turn may charge their customers for access,” says an ANZ spokesperson.

“In addition, ANZ NZ is required to pay a levy of $1.4 million per year to MBIE to cover regulatory costs.”

As open banking emerges, there’s a clear tension in that incumbents must pay to open the system to players who are looking to disrupt the status quo.

However, the banks also understand that resisting too hard will lead to them, and New Zealand more generally, falling behind.

As things stand, New Zealand is approximately a decade behind the United Kingdom when it comes to what the average person can do.

Today, in the UK, when you apply for a mortgage, credit card, or rental property, you simply tap a button to securely grant the lender access to your financial history via what’s called an API (a secure digital pipe). The organisation on the other side will instantly be able to analyse your income and spending habits in seconds.

It has also become ordinary in the UK to use apps like Snoop, Money Dashboard or Revolut to see your credit cards, mortgages, investment portfolios, and everyday checking accounts from completely different banks all on one screen, updating seamlessly in real-time.

According to ANZ, customers who give their consent can provide copies of bank statements, their balances, transaction history, a list of their accounts or information to identify them to any accredited organisations.

However, given that the free data pipelines are still being rolled out in New Zealand and that we’re still early on the adoption curve, there’s still some to go before this will be normalised in the way it is in the UK and Europe.

That gap is, however, closing. And that process is being sped up because New Zealand banks cannot charge fintechs to access your data, as opposed to the early days in the UK where massive roadblocks were caused by allowing banks to charge.

Under New Zealand regulation, they have to provide this information free of charge, which means those costs can’t be passed onto consumers down the line.

What’s changed already?

Many of us are already using open banking services without realising it – and it’s quietly delivering efficiencies that seemed far-fetched not too long ago.

Jonathan Dale, the head of payments development at BNZ, tells me that 2.6 seconds is proof of concept.

That’s the time it now takes for payments processed through the BlinkPay app to appear in a BNZ account.

This service negates the need for a credit or debit card, allowing you to pay directly through the BNZ app. It’s only possible because open banking allows for the sharing of information in this way. It means consumers and small businesses now have an option other than Mastercard or Visa when it comes to making payments – effectively introducing competition in a space that was previously locked.

The challenger sniffs an opportunity

As the smallest among the major banks in New Zealand, Kiwibank has the most to gain from the promise of increased competitiveness.

It’s little surprise then to see Kiwibank moving incredibly quickly to recently announce that Kiwibank customers would be able to access open banking-enabled payments and data-sharing directly through internet banking and the Kiwibank app.

Kiwibank chief customer officer of Retail Mark Stephen says the bank is partnering with local tech company Wych and is working with others (including Volley and Akahu) to deliver its open-banking services ahead of schedule.

“As a smaller bank, we’re choosing to collaborate to move faster and deliver more value to customers,” says Stephen.

“We want to build strong partnerships with fintechs across New Zealand because that’s how we’ll bring new ideas to market more quickly.”

Kiwibank sees an opportunity among business owners, given that they have been the early adopters in the international market.

Stephen tells me that through open banking, Kiwibank is offering easier account-to-account payments, faster access to funding and the ability to better manage their cash flow.

All this comes down to speed. With open banking, information moves faster, so it becomes easier to know exactly what’s going on in the moment rather than having to wait days for an answer.

And this is where the real advantage will lie for your average Kiwi consumer. In the coming years, it will become easier to gauge your options, make payments, switch service providers, mix and match products.

It will all be about flexibility and finding the best mix of services that suit your needs.

There can perhaps be no better way to explain open banking than by pointing out that more than $100 million has been invested across the industry to be able to move something from point A to point B in 2.6 seconds.

Now take that speed and apply it across all your banking processes. That’s the promise of open banking. And that’s why so many people are excited about the doors it could open to better competition in this space.