Kiwibank claims open banking lead over Australian-owned rivals
Thursday, 28 May 2026
Kiwibank says it’s leapfrogged its Australian-owned rivals by becoming the first bank to implement open banking for both retail and business customers.
Open banking is the great hope for injecting more competition into the banking sector, which came under fire for its high profits at the Commerce Commission’s Competition Matters conference in Auckland earlier this month.
Open Banking is the term for the systems that enable financial apps and technologies to connect securely and directly with customers’ bank accounts.
That allows third-parties like Xero, Volley, Akahu, Poli and Paysauce to develop apps and services for customers that plug directly into banks’ systems, which could lead to things like easier applications for loans, faster payments, and track their spending.
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Bank customers who want to use an open banking service, for example Volley - which allows people to split bills on meals out with friends - have to give their consent for it to happen.
“Open banking has the potential to transform how Kiwis manage their money, making it easier to pay, share data securely, and access more personalised service,” said Kiwibank’s chief customer officer for retail, Mark Stephen.
“From today, Kiwibank customers can access open banking-enabled payments and data sharing directly through internet banking and the Kiwibank app,” he said.
Banks hold troves of data on their customers, but New Zealand’s new Customer and Product Data Act gives people and businesses power over data held on them by big businesses, including banks.
Stephen said Kiwibank had partnered with technology company Wych to connect Kiwibank with accredited third parties quickly and securely.
Standards have been developed to ensure that only trusted third parties are able to operate in the open banking space.
An example is that Kiwibank is enabling open banking capabilities for customers with home loans arranged by New Zealand Home Loans, a mortgage adviser network focused on helping customers pay off home loans faster.
New Zealand Home loans is owned by Kiwi Group Capital, which also owns Kiwibank.
Kiwibank said it was six months ahead of its regulatory deadline for open banking.
It expected businesses to be the earliest beneficiaries of open banking.
Elliot Smith, Kiwibank’s chief customer officer for business, said in markets where open banking was advanced - such as the UK and Europe - businesses had been early adopters driven by the potential for greater automation, cost efficiencies and stronger cashflow management.
“For example, Kiwibank business customers can access apps via Akahu such as PaySauce, which simplifies payroll and compliance,” Smith said.
There are hopes that open banking could make the market for loans to small and medium-sized businesses more competitive, as currently interest rates for Kiwi businesses are among the highest in the entire OECD organisation of rich countries.
New Zealand is playing catch-up on open banking, and lags much of the developed world, and also many countries usually considered to be developing.
At the Commerce Commission’s conference, delegates were told New Zealand had some of the least-developed digital infrastructure in the world and, until recently, had been grouped with countries with archaic, legacy systems like Russia, North Korea, and parts of Africa.
On the University College London map of digital infrastructure, New Zealand has recently been promoted from the grey zone of least-developed countries to yellow, which designates countries that have a digital infrastructure deficit, such as lacking real-time payments, and do not yet qualify for green advanced status.
According to UCL, countries with more advanced digital infrastructure than New Zealand include some African countries, most of Asia and South America (including Bolivia and Peru), and almost all of Europe.
On Wednesday, payments fintech company Blinkpay, which is owned by BNZ, announced it had proven that nearly real-time payments were possible using open banking in New Zealand.
Blinkpay chief executive Adrian Smith said test payments moved through BlinkPay appeared in a recipient BNZ account in 2.6 seconds after customer approval for the payment.
Smith said the result showed New Zealand’s banking infrastructure could support the fast payments.
“When money can move in seconds rather than hours or overnight, businesses make decisions differently. Customers commit with more confidence. That’s the real shift here – not just faster payments, but payments that work more in step with real-world needs,” he said.
MPs were confronted with the issue of how slow payments were in New Zealand at recent select committee hearings, but heard from Westpac chief executive Catherine McGrath that faster payments were possible.
“We process every 30 minutes at the moment in New Zealand, which is very different to the UK before they put faster payments in place,” McGrath told MPs in February.
“It wouldn't be beyond the realm of possibility to get that same existing system [New Zealand’s current system], for example, to process every 10 minutes,” she said.
One of the concerns of fintech companies is that banks will seek to stymie the growth of open banking by charging fees for access to customer data.
Smith said Kiwibank would not charge for access.