Delay for open banking ‘ridiculous’
| Author | Tamsyn Parker |
| Published date | 12 November 2022 |
| Publication title | Daily Post, The (Rotorua, New Zealand) |
Commerce Minister David Clark announced on Thursday the banking sector would be the first cab off the rank to use the new consumer data right framework which means banks will be required to share a customer’s data with a competing bank should a customer request it.
The change is designed to allow Kiwis to shop around for better deals from banks and other financial service profits. But the Government thinks it will take up to two years to implement.
Stubbs, the founder and chief executive of KiwiSaver provider Simplicity, has hit out at the timeframe.
“Two years is a ridiculously long time to implement something as simple as open banking.
“We estimate this delay will cost ordinary New Zealanders between $2 billion and $4b in excess banking fees. And that’s for the two years the Government says it will take.”
Stubbs said given how ambitious the overall policy was, the change would probably take even longer.
“The rest of the world brought in open banking first, with the much more complex issue of consumer data rights later on. Why is this Government doing it the other way round, when the consequences will cost Kiwis billions?
“The big-bank CEOs will be cracking open the champagne tonight. The Government has just handed them a two-year suspension of competition, and a free pass to carry on making excessive profits from Kiwis to give to the Aussies.”
He said the Government was either out of touch with the banking industry, or was captive to it.
“Here is the farce of this announcement. The same big banks as we have here are already using open banking, and we know they are already prepared for it here. In Australia, open banking means there are now 82 banks , with huge customer choice and lower fees. Do we really have to wait two years for the same thing here, so the Government can engineer, hopefully, the perfect solution?”
New Zealand Bankers’ Association chief executive Roger Beaumont said it had told the Government that banks needed time to enable it to build quality products for consumers.
“The consumer data right [CDR] will help make open data sharing a reality for banking and other sectors. It’s important to make sure we get it right for consumers. Because of the weight of other regulations and compliance falling on banks at the moment, such as the new conduct regime and increased capital requirements, along with...
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