Open finance is tipped to become the standard for consumers' financial welfare and empowerment, according to a new New Zealand FinTech research report.
FinTechNZ executive director Jason Roberts says the huge opportunities for Kiwi businesses and consumers can’t be ignored; with open finance set to increase competition and innovation across many sectors.
“We are in the 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.
“Emerging fintech like open finance is redefining the way we borrow, lend, save, spend, store and transfer money. Disruptive technologies are revolutionising traditional financial services, creating new services for consumers and opportunities for start-up entrepreneurs and corporate innovators.”
FinTechNZ, part of the NZ Tech Alliance, is a not-for-profit that brings together New Zealand financial service providers, tech innovators, investor groups, government regulators, financial educators.
Open finance means individuals and businesses will be able 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.
The open finance research report will be launched by digital economy minister David Clark on Wednesday, March 30.
There is a low level of awareness and understanding in New Zealand about open finance and the benefits it offers. The research shows 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 tyranny of distance and manoeuvre closer to the centre of the emerging framework of digital trade and finance.
Some of New Zealand’s most successful international fintech’s are already leading the way, the research report says.
But fintech can only thrive when regulation allows it to. 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 report says New Zealand has historically been at the forefront of equity, be it financial or otherwise, the path toward open finance presents less an obstacle than a continuation of our ability to adapt, lead and succeed in a new era of global digital transformation.
Roberts says 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.
“Moreover, it provides compelling evidence in support of progressive and controlled adoption of open finance.”
Research participants wanted to see a bigger shake up and redesign of the finance system for the Aotearoa environment and consumers.
This is from values, ethics and accessibility through to co-design of algorithms, user interfaces, marketing and education about what open finance could offer. The pending consumer data rights legislation is expected to enable this.