Education Key To Open Banking Success, BNZ Survey Finds

While many New Zealanders have heard of open banking, few understand its benefits, according to new research from BNZ.*

Open banking gives bank customers the power to control and securely share their financial data with trusted third parties like fintechs.

Access to that data means banks and fintechs can create highly tailored products and services, such as apps that offer insights into spending habits, budget planning and savings goals, or that instantly share financial information with multiple lenders, making it easier and faster to apply for a loan.

"Our survey found that while 60% of respondents have heard of open banking, only a quarter (26%) have some understanding of what it means," says Karna Luke, BNZ Executive, Customer Products and Services.

“However, after learning more about its capabilities, nearly three-quarters (73%) expressed an interest in using open banking services.

"This shows that New Zealanders are very open to new ways of managing their finances but need the right information to feel confident about using the technology,” says Luke.

The survey also shed light on some risky practices highlighting a need for greater education. Two-thirds (66%) of respondents reported having used payment services that rely on screen scraping. This practice puts users' data at risk by requiring them to share their online banking login credentials with third parties to access certain services.

"Open banking provides a safe and secure way to share your financial data with trusted third parties without ever having to disclose your banking login details. It’s much more secure than screen scraping, but our survey shows a big gap between awareness and understanding of open banking's benefits, particularly around security,” says Luke.

Bridging the knowledge gap

Luke says education is key to building the trust and confidence needed to drive greater adoption of open banking and realise its benefits.

“At BNZ, we’ve been collaborating with fintechs since 2018 to develop innovative products and services that showcase open banking’s potential, and we’ve developed content and resources to inform and engage our customers about the benefits.Already, more than 250,000 BNZ customers are using apps and other services made possible through open banking.”

"While we've made good progress, there's still more work to be done to educate New Zealanders about the benefits of open banking and build trust in its capabilities. This will be crucial to ensure that everyone can take advantage of the huge potential open banking offers."

Luke highlighted the importance of the Consumer Data Right (CDR), which is currently progressing through Parliament as part of the Customer and Product Data Bill. The CDR sets rules around how customer data is shared and managed and ensures legal safeguards are in place to protect New Zealanders.

"While banks have been working hard to build the technology needed for open banking, the CDR will provide the rules and protections necessary to ensure people feel secure and confident using these new services," Luke says.

“The Government’s commitment to investigate opportunities for early adoption of open banking by government agencies, in line with recommendations from the Commerce Commission, is also a welcome move which could significantly boost public trust and understanding.

“We're committed to working alongside regulators and the wider industry to ensure that open banking delivers on its promise of greater financial empowerment and choice for all New Zealanders."

For more information about open banking and BNZ's initiatives, visit bnz.co.nz/openbanking

*Source: BNZ Voice customer panel survey, 18th to 28th July 2024. Total responses: n=355. The profile of participating customers was not controlled for this survey.

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