What Happens When Banks Lose Control? – Tech for Everyday People Series
For most of us, banking has worked the same way our whole lives. You sign up with one of the big four, your money lives in their walled garden, and if you want to pay someone, you do it on their terms, using their app, their card network, and their fees. Switching banks is a hassle. Letting a budgeting app see your balance means handing over your password and hoping for the best.
That is starting to change. Quietly, and without much fanfare, New Zealand is rolling out something called open banking, and by the end of 2026 it will reshape how money moves in this country.
The idea is simple. Your bank account information, and the ability to make payments from it, belong to you, not to your bank. Open banking forces the banks to provide the same kind of secure connection, letting you grant other apps and services controlled access to your account. You choose what they see, for how long, and you can switch off access at any time.
This is not happening because the banks woke up feeling generous. It is happening because the Commerce Commission spent two years studying retail banking and concluded what most New Zealanders already suspected: the market is not competitive enough, and consumers are paying for it. The government has legislated, and the four major banks have committed to common standards through the industry body Payments NZ. Kiwibank is expected to come online in June, completing the set. Australia, the UK, and the EU have already walked this road, and the benefits there have been measurable: new lenders, cheaper payments, better tools for managing money, more people switching providers. It is not a revolution that arrives with fanfare. It arrives as a series of small choices that, taken together, start to feel different.
So, what changes for you?
First, paying for things gets cheaper and faster. When you pay a small business by card today, that business loses roughly 1.5 to 2 percent of the transaction to fees, and the money takes a day or two to settle. An open banking payment goes straight from your account to theirs in seconds, for a fraction of the cost. That saving flows back to local businesses, and over time, into the prices you pay.
Second, switching banks stops being painful. Right now, moving to a different bank means re-routing direct debits, re-entering payees, and untangling years of automatic payments. With open banking, that information can move with you in minutes.
Third, the tools you use to manage money get better. Budgeting apps, accounting software, lenders, and investment platforms can plug into your accounts with your permission and give you a real picture of your finances, without you typing in numbers or sharing passwords. The KiwiSaver provider that shows you an honest view of your retirement. The lender who approves a mortgage in a day because they can verify income directly. The local cafe owner who balances a week of sales over a flat white.
Fourth, your data stays yours. You decide exactly what to share, for how long, and you can see it all in one place. Pull the plug whenever you want.
You might wonder whether any of this is safe. The honest answer is that the new connections are more secure than what most of us do today. Sharing your bank password with a budgeting app, handing a card to a waiter, typing a stranger’s bank account number from a handwritten sign at the market: these are everyday practices that should make us nervous and somehow do not. Open banking replaces them with tamper-proof permissions you authorise inside your real bank app, the same way you confirm any payment. Nothing happens you do not see, and nothing happens you cannot undo.
In our next issue, we look at how one Coromandel-grown venture, Shop Local, is using open banking to put more of every dollar back into the pockets of the people who actually run our towns. Cafes and tradies, growers and artisans, the corner store and the lawnmower repair shop: small operators whose cut on each sale gets quietly eroded by card fees they never asked for, and who stand to benefit first as the way money moves changes beneath them.
Words by David Crompton
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