Banks could be better at streamlining processes

Open banking can’t come soon enough for mortgage adviser, said AdviceHQ director David Green.

Monday, January 22nd 2024, 2:58PM

by Sally Lindsay

The four main banks – ANZ, BNZ, ASB, and Westpac – are due to be ready by May to start implementing open banking, with Kiwibank due to join in 2026.

Green says looking at the wider space around banking and mortgages shows there is an immediate opportunity for streamlining by the banks and it should have started already.

“It is still reasonably difficult for people to move banks, there is a lot of paperwork for any banking transaction, there is not a lot of digital adaption and often tasks, such as anti-money laundering checks, are being carried out by an adviser, a bank branch and a lawyer on one customer.

“Do we need all that? Are there better ways to do it?

He says from a mortgage adviser’s view, “we have got authority to act for a client and deal with third parties, but we can’t access their banking details online to see their balances. We don’t want to move balances or do any transactions but being able to see their bank balances, loan details and other information is really helpful in giving them the right advice without having to ask them for their bank statements or a screen shot.

“It is about streamlining and there are a lot of opportunities in this sphere.”

Green says greater access to clients’ banking data is an area that could be looked at in a rewrite of the Credit Contracts and Consumer Finance Act (CCCGA). However, from his understanding there has been no consultation with the adviser industry at a grassroots level, where these practicalities can be discussed in detail. “This is why we ended up with the CCCFA that wasn’t fit for purpose.”

One of the biggest concerns with open banking is the risk consumer data will not be adequately protected.

The government last year committed to bring in a consumer data right framework to give consumers the right to have their data shared.

Payments NZ has developed a range of standards, rules and guidelines that will support full-scale open banking and it says bringing the four main banks into line with common standards enables consumers to have more choice in who they want to share their financial data with and how they want to make payments.

It says the country’s banking system will be the first in New Zealand to introduce a consumer data right so it is critical things head in the right direction from the start. Also any legislation must anticipate emerging technologies and trends, such as digital identity and prioritise the experience of consumers.

Tags: Open Banking