Open finance set to benefit New Zealand consumers - report
Open finance is expected to become the standard for consumers' financial welfare and empowerment, according to an Aotearoa fintech research report.
"The huge opportunities for Kiwi businesses and consumers can't be ignored, with open finance set to increase competition and innovation across many sectors," says FinTechNZ executive director, Jason Roberts.
"We're in a perfect position, with open finance in its infancy, to leverage this technology to help contribute to reducing financial exclusion and lay down the foundations for a strong digital economy. Open finance, if done right, provides an enormous opportunity to address inequities, both now and in the foreseeable future, helping Kiwis better manage their finances."
He says emerging fintech such as open finance is redefining how we borrow, lend, save, spend, store and transfer money. Disruptive technologies revolutionise traditional financial services, creating new services for consumers and opportunities for start-up entrepreneurs and corporate innovators.
Part of the NZ Tech Alliance, FinTechNZ is a not-for-profit that unites New Zealand financial service providers, tech innovators, investor groups, government regulators, financial educators.
Open finance will allow individuals and businesses to access and use any financial data supplied by them, or created on their behalf by their provider, be that a bank, insurance company, utility or any firm that holds their financial transaction data.
Digital economy minister David Clark will launch the open finance research report on Wednesday, March 30th.
According to the report, there is low awareness and understanding in New Zealand about open finance and its benefits. This needs to be improved, the report says.
Improvements in the connectivity of financial systems, computing power and data collection offer an opportunity to overcome New Zealand's isolation problem.
"Some of Aotearoa's most successful international fintechs are already leading the way. But fintech can only thrive when regulation allows it to," the report says.
"It's critically important that New Zealand's fintech ecosystem is set in a foundation of trust, clear rules around liability, terms of access and privacy, technical standards and collaboration with government."
The Open Finance Aotearoa Research Report says New Zealand has historically been at the forefront of equity, financial or otherwise. It says the path toward open finance presents less an obstacle than a continuation of the ability to adapt, lead and succeed in a new era of global digital transformation.
"Open finance could make Aotearoa's financial services industry more transparent, equitable and competitive and provide access to more products and solutions, even to those who are not digitally literate," says Roberts.
"Moreover, it provides compelling evidence supporting progressive and controlled adoption of open finance. Research participants wanted to see a bigger shake up and redesign the finance system for the Aotearoa environment and consumers."
He says the pending consumer data rights legislation is expected to enable this.