Open finance momentum expected to gather pace in 2025

New regulations dictating how open finance works for the banking sector could be in place by the end of the year with advisers encouraged to start thinking about how developments could change the way they do business.

Towards the end of the last year, four of the main banks achieved their latest milestone in the journey to open banking, declaring they had met the deadline for delivering Payments NZ’s Account information API standard. An API, or application processing interface, allows software systems to communicate with one another, giving third-parties access to consumers’ data.

Josh Daniell, founder and chief operating officer of open finance infrastructure fintech Akahu, expects rapid progress on regulated open finance over the next year or two but warns it will be some time before we see data flowing freely between all financial services companies. 

At the moment, each third-party participant signs a contract with the bank to access their API and while regulation will make those contracts obsolete, there will still be limitations for years to come.