It would do so by requiring banks to share transaction information with competing banks if a customer requests it.
This change, known as a Consumer Data Right (CDR), was forecast by Good Returns and TMM in August but was delayed without notice back then.
It has now been announced in the wake of big profit announcements by two large banks.
CDR is sometimes known as open banking and ensures that banks share customer information on secure networks, to make it easier for customers to switch between banks.
“Open banking ensures banks must share customer information if they request it,” the Minister of Commerce, David Clark, said.
“Under open banking, if somebody wanted to re-fix their mortgage at a lower interest rate, they could ask their bank to securely share transaction information with a competitor.
“They could also instruct their bank to share specific data with a financial adviser of their choice.”
The Government will release more information on this later and is hoping to eventually extend the system from banks to insurance and telecommunications.
Similar policies are in place in Australia and Britain.
The New Zealand Bankers’ Association says CDR will help make open data sharing a reality for banking and other sectors, but it is important to get it right.
Its chief executive Roger Beaumont said this would be a challenge.
“Because of the weight of other regulations ….and increased capital requirements, along with staffing and other supply chain constraints, we’ve told the government that banks need time to implement it,” he said.
Privacy and dada security would be at the top of the priority list.
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