Open banking arrival means third parties can help with budgeting, loans and power bills – Diana Clement

ANZ, ASB, BNZ and Westpac went live with regulated open banking in December, and Kiwibank joined for payments in June. Kiwibank’s account-information service is due to follow in December.

“Open banking enables you and me to interact with our bank accounts in another piece of software,” Josh Daniell, co-founder of Kiwi fintech infrastructure provider Akahu, explained. Akahu provides the back-end connection between the banks and the apps customers want to use.

For the average person, it’s not the technology behind the scenes, but the tools we can now use without handing our banking passwords to third parties, that matter.

Budgeting and money management

PocketSmith, SortMe, and BudgetBuddie all now connect directly to your bank transactions, categorising spending, identifying hidden savings, and forecasting. Two more apps, Steady and Payday, are in final “beta” testing with a limited number of customers. BufferBuilder, provided by Sorted, helps users build an emergency fund. They’re all budgeting on steroids compared to paper and pen or even Excel.Feijoa is another useful app enabled by open banking. It’s designed to round up your daily transactions and automatically sweep spare cents into your KiwiSaver. According to the company, it is used by tens of thousands of Kiwis.

Investment and financial advice

Open banking allows an investment provider, with a customer’s authorisation, to initiate a payment directly from their bank account, with the investment then happening automatically, Daniell said. Fintech platforms such as Tiger Brokers, Blossom, and Simplicity are already using open banking in this way, either for one-off or recurring investments.

It’s a game changer for financial advice. Daniell cited the example of AMP’s Moneyfit service, which, when clients allow it, can give a seamless feed of their financial data to advisers, who can act on changes and patterns, and provide timely and proactive advice rather than waiting for an annual review.

Loans and hardship

Open banking is also cutting paperwork for a variety of financial tasks. Loan and mortgage applicants can share their bank data with a few taps in the application app rather than uploading statements.

It is also speeding up KiwiSaver hardship applications, with Public Trust and Debtfix using the technology to gather the financial evidence needed at a stressful time in people’s lives.

“Open banking extracts the necessary financial proof instantly,” Daniell said.

Open electricity and telecoms

The Government’s Consumer Data Right (CDR) framework is designed to extend beyond banking into sectors such as electricity and telecommunications to enable automatic price comparisons via services like Powerswitch. It should mean comparison sites can make much more accurate comparisons based on actual usage, rather than estimates.

The future

Developments overseas point to where open banking and other use cases could go as New Zealand catches up. Daniell points to the United States, where AI chatbots such as ChatGPT and Perplexity can securely access bank transactions, giving context to personal financial questions. Eventually, AI could scan the market, surface better products, and even handle the tedious task of switching providers.

“AI is very patient and happy to do those tasks.”

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