10 Minute home loan approvals on the cards
One of the possibilities of open banking includes the ability for borrowers to get pre-approval for a home loan in 10 minutes and to make instant low-cost payments.
Wednesday, February 12th 2025, 6:00AM
by Sally Lindsay
One of the possibilities of open banking includes the ability for borrowers to get pre-approval for a home loan in 10 minutes and to make instant low-cost payments.
Anything over 24 hours after all documents are provided means a lender is slow.
While this is happening around the world, New Zealand is years behind and it is hurting productivity, Andrew Bayly, Commerce and Consumer Affairs Minister says.
Why is it not happening in New Zealand? Bayly told mortgage and financial advisers at the Financial Services Council Outlook 25 breakfast, it is because New Zealand does not have the right framework.
“It is a major driver for me. We're going to open up banking and bring in competition.”
The four largest banks are ready to partner with third-party financial service providers to offer more open banking services to customers. ANZ, ASB, BNZ and Westpac met November’s deadline to have the technology in place for customers to securely share banking information with third party providers.
Payments NZ, the bank-owned governance body that oversees payment systems, says there has already been a high uptake of open banking.
Part of the open banking framework will be the Customer and Product Data Bill, which Bayly expects to become law by the middle of the year.
The Bill will establish a framework to unlock the potential for consumer data driving innovation and competition in key sectors.
“The reality is that New Zealand suffers from an overly concentrated market in several key sectors of our commerce, whether that be banking, groceries, building supplies or parking services.”
The Government consulted on applying bill to the banking sector to enable open banking. “The ability to provide new data driven products and services is hugely rewarding and exciting,” Bayly says.
MBIE is responsible for drafting the detailed regulations. The formalisation will mean consumers no longer need to share their login credentials with third-party apps and the new rules will also outline liability, fees, what data can be accessed and the standard of performance expected from APIs.
APIs, or Application Programming Interfaces, are digital connections that allow authorised third-party services, like fintech companies, to securely access and exchange a customer's banking data with their bank, provided the customer gives consent, enabling features like making payments directly through third-party apps with their bank account details.
Bayly says the bill is not only to create a regulatory environment but to also give fintechs the power to come in and offer “real competition” in the banking sector. He regularly talks to 30 fintechs.
“It’s an exciting development. It has been slow in certain parts of the world, but in places, such as Brazil, it has gone well and we need to make sure we’re at the same sort of speed.
He says the impetus is competition.
“The reality is that New Zealand suffers from an overly concentrated market in several key sectors of our commerce, whether that be banking, groceries, building supplies or parking services.”
He says the OECD and others have drawn a link between the country’s lack of competition and falling productivity. “The spotlight is well and truly focused upon invigorating competition.
“From the Government's perspective, we will be going through every key initiative and programme of work line by line and asking ourselves and our officials, will this grow the economy? Will this improve competition? Will this help New Zealanders to take legitimate risks? Will it encourage innovation and enable them to offer new products and services?
“And if the answer is no, we're not going to progress it. But if the answer is yes, we will progress it.” Bayly says competition is one of the most important ways to drive productivity, grow the economy and living standards.
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