Open banking promises faster loans, smarter money moves
New Zealand is inching closer to a more connected, consumer-centric financial system as open banking gains traction across the sector, according to Westpac.
Wych CEO Dermot Butterfield (pictured) shared a forward-looking view of what’s coming—and what’s holding the country back.
“Open banking is about making data flow seamlessly between banks and service providers, much like how pipes carry water from a reservoir to your tap,” Butterfield said.
Wych, which operates in Australia and now New Zealand, plays the role of these “pipes,” facilitating secure data transfer between financial institutions and third-party service providers.
From three days to five minutes: Lending is the low-hanging fruit
One of the earliest benefits of open banking will be faster loan and mortgage processing.
“The first thing we'll do is make some of our existing journeys work better. We'll reduce friction and make things faster,” Butterfield said. “You can see the time to ‘yes’ reducing from two or three days to five minutes.”
This means that mortgage brokers, lenders, and borrowers could soon benefit from instantaneous access to verified financial data, streamlining everything from car loans to home loans.
New Zealand continues to trail Australia in open banking maturity, with critics arguing the system remains underdeveloped and overly reliant on transitional measures, including a Kiwibank-centric model that critics argued lacks long-term competitiveness.
Beyond lending: Budgeting, payments, and smarter money decisions
Open banking’s potential goes well beyond just lending. It promises to unlock smarter personal finance tools, real-time insights, and better payment solutions, Westpac reported.
“There’s a lot of work in the space enabling organisations and individuals to connect to their data and bring that in so that they can get a learning. You no longer have to give away your bank credentials,” Butterfield said, referencing the improved security model.
“People can move money in a better way, in a faster way, in a more informed way.”
Apps like WeMoney in Australia—widely used for managing debts and consolidating financial accounts—are examples of where New Zealand might be headed.
“It’s helping people get control of their finances on a day-by-day basis. It’s plugged in, consuming your data, telling you what's happening, where it's coming, where it's going. It's really, really strong,” Butterfield said.
Barriers to innovation remain—but so does optimism
Despite these promising developments, New Zealand’s open banking journey is still at a nascent stage.
“The cost of innovation is high in New Zealand, the cost of participation is high,” Butterfield said.
The real payoff, he believes, will come in the second wave of open banking, once early solutions have matured and overseas models are adapted for local consumers.
“We are positive. We think that there's a real opportunity for great things to happen here,” he said.
Butterfield’s optimism contrasts with industry voices—such as Tex Edwards and Consumer NZ—who cautioned that New Zealand’s progress is uneven.
They have noted a lack of clear leadership and slower-than-expected rollout of open banking functionality in New Zealand, arguing that greater regulatory support and infrastructure investment are urgently needed to realise the full potential of open banking.
