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Two key announcements from the Commerce Commission expected this week are anticipated to give clearance for Payments NZ to set standards for open banking. Alongside new legislation currently making its way through Parliament, these decisions are set to push open banking into the mainstream.

Open banking means consumers may share their financial data with third parties, such as fintech companies for the promise of faster, more efficient, and safer financial services. 

Banks use secure connections known as Application Programming Interfaces (APIs) to ensure data security for customers. The upcoming legislation, known as the Consumer and Product Data Bill, will ensure that APIs are secure and standardised across all banks, giving consumers greater control over their data.

This change is a ‘fundamental shift’ in how data ownership is perceived, according to Ben Moore, technology editor at BusinessDesk. With this development competition among financial institutions is expected to increase, which may benefit consumers with better services and lower prices. The concept of open banking has been successfully implemented internationally for nearly a decade. 

Read more over at Newsroom and read the Commerce Commission’s final report here