Open banking is around the corner, and by using technology and a human-centered strategy, BNZ is ironing out its portion.
As New Zealand is preparing to implement an open banking system in the near future, the Bank of NZ (BNZ) is preparing to have the ancient manner of banking alongside the new one, while legislation is catching up.
Speaking at the SAS Road2AI case in Sydney on Friday, BNZ Data Strategy and Transformation Head Sonya Crosby said her bank’s innovation has taken a “human-centered” design approach, extending it to the open banking mandate as well.
As explained by Crosby, part of the technical solution is the customer’s explicit consent and explanation of what data is used.
“Digital commitment with the client to say,’ This third party has genuinely requested this access, they want to use it for this purpose, are you in agreement and are you going to authorize it? And here’s the risk of you doing that,” Crosby said.
In March, a couple of new norms were implemented in NZ that allowed third parties to work with banks to launch fresh financial services. And in May, Payments NZ introduced its API center which said it would pave the way for higher transparency in payments and banks, and “to bring a fresh API-enabled ecosystem to life.”
BNZ has put up a dummy data sandbox and is working with Payments NZ to manage the mandate’s governance side.
“It’s also about customer literacy,” said Crosby. “Instead of downloading your bank data and sending it to your accountant, for instance, which is not a very secure way of transmitting your data— or screenscraping, which is even worse— to have an API in location, which is simply a very secure way of transmitting data, we are simply lowering the danger, but if the client truly understands that, have we implemented this?
The CDR will enable people to “own” their information by giving them open access to their operations in banking, power, telephone and internet, as well as the right to regulate who can have it and who can use it. Banking is the first industry to be covered by the CDR under an open banking system.
Open banking is an instance, according to Crosby, where BNZ combines the old and new methods of banking.
“We’re still working with static regulations and blanket approvals in ancient marketing games. That’s something the industry’s maturity— we need to get away from it and assist us use tech and our customer’s distinct thinking and mindset to genuinely allow this option,” she said.
BNZ brings its customers to the bank to help develop new products. “Because once people have opted, it’s it you can not go back to them and say— and I really wanted to know about it— and if you haven’t thought about giving them options, then, in a distinct context, you lost them.” One instance is the application method for home loans, where at the start BNZ brought young first homeowners into the discussion, which Crosby said continued into the design phase, helping the bank to better comprehend what they truly wanted.
“When you got them involved early in the discussion and you got them involved in the design, they’re very prepared to give their information,” she added.