Here, Simon Lyons, Chief Strategy Officer at obconnect, takes us on the journey from one minister's vision to protect consumers from fraud and build confidence in the banking system, to the delivery and implementation, in record time, of an all-new national Confirmation of Payee (CoP) scheme in New Zealand.
It's been a journey made possible by the technology and expertise delivered in partnership by obconnect and Raidiam, and defined a new global benchmark, showcasing speed, security, cost and extensibility along the way.
The Minister’s Challenge: A Safer, More Trustworthy Banking System
In early 2023, New Zealand’s Minister for Commerce and Consumer Affairs, Andrew Bayly, issued a clear directive to the nation’s banks: take decisive action to protect consumers from fraud and build greater confidence in the banking system. One headline measure was to introduce a Confirmation of Payee system – an approach proven in the UK and Australia, but with a uniquely Kiwi twist.
A Global Search for the Best Confirmation of Payee Solution
The New Zealand Bankers Association (NZBA) engaged global experts to identify the best way forward. They scoured the globe, consulting leading experts and technology providers, determined to find not just a product, but a future-proof ecosystem. Their vision was clear: deliver a solution that excelled in four key areas – speed, security, cost-efficiency, and extensibility.
Recognising the scale and specialised complexity of the challenge, obconnect brought in Raidiam, whose expertise in building secure, scalable trust frameworks for open banking and payments ecosystems was second to none. In partnership, we set out to demonstrate that a centralised, standards-driven CoP model could deliver better outcomes, faster, and at a fraction of the cost seen elsewhere.
Rapid CoP Implementation: Built for Speed and Scale
Speed was non-negotiable. In other markets, CoP rollouts had taken years and cost individual banks over £100 million. The NZBA demanded a model that would allow banks to adopt the solution quickly and with minimal disruption.
- Centralised Ecosystem: Raidiam’s Trust Platform, Raidiam Connect, provided the secure, central infrastructure needed for all participants to connect seamlessly. Banks simply connect to two APIs and make minor digital journey changes – drastically reducing the time and complexity of onboarding.
- Proof in Practice: Within just six weeks, we built a fully functioning CoP ecosystem, complete with a trust framework, onboarded banks, a portal, and an API suite. This live demo proved that rapid, coordinated delivery was possible.
- Record-Breaking Rollout: The result? Ten banks went live initially, now thirteen, covering over 95% of consumer bank accounts – all in just six months and twelve days. This was only possible through the combined expertise and relentless focus of both obconnect and Raidiam.
Security by Design: Trust at the Core
Security was at the heart of every decision. The new CoP system enables customers to check that the account name matches the account number before making a payment, significantly reducing the risk of fraud and mistaken payments.
- Central Trust Framework: Raidiam Connect enabled secure, real-time verification between banks. It ensures that all sensitive data remains within each bank’s own systems, while enabling secure, standards-based communication across the ecosystem.
- Industry-Leading Standards: The solution leverages the most robust security protocols in existence, ensuring that data sharing is protected, trusted, and compliant with global best practice.
- Real-Time Verification: When making a payment – whether to a new payee, editing an existing one, or making a one-off payment – the system checks the entered details against the recipient’s bank records, providing a match, partial match, or no match notification.
- Customer Empowerment: Customers are prompted to pause and double-check details if there’s any doubt, helping to thwart scams and reduce errors.
Cost Efficiency: Doing More with Less
The NZBA was determined to avoid the spiralling costs seen overseas. By centralising both the trust and software layers, the solution slashed the need for each bank to develop and maintain its own systems.
- Reduced Internal Spend: Instead of each bank shouldering massive development costs, Raidiam’s Trust Platform and obconnect’s API connectivity created economies of scale and a single, streamlined onboarding process.
- Minimised Disruption: Banks could focus on connecting to the service, rather than rebuilding core systems – saving time, money, and resources.
- No Drawn-Out Implementation: The combined approach meant no drawn-out implementation programme with spiralling costs and long waits for customers to start realising the benefits.
Ecosystem Extensibility: Built for Today and Tomorrow
From the outset, New Zealand’s approach was to build an ecosystem, not just a product. The centralised model is designed to support multiple services – Confirmation of Payee is just the beginning.
- Future-Proof Architecture: The same trust framework and API infrastructure can be rapidly extended to new products and services, from anti-scam initiatives to broader data-sharing capabilities.
- Low Impact, High Potential: The design ensures that whatever comes next – whether regulatory or market-driven – can be adopted with minimal effort by banks.
- A Platform for Innovation: With the foundations now in place, New Zealand’s banks are well positioned to roll out further API-based products, accelerating innovation in financial services.
Governance and Collaboration: The GetVerified Model
A key enabler was the creation of GetVerified, a bank-owned entity with a government mandate to deliver CoP and future data-sharing infrastructure. Led by an experienced leadership team drawn from across the banking sector, GetVerified acts not as a payment system operator, but as a rules and standards body – ensuring buy-in, agility, and alignment across the sector.
Lessons From New Zealand’s Approach to CoP
New Zealand’s Confirmation of Payee journey offers powerful lessons for banks, regulators, and fintech innovators everywhere:
- Minimise effort for banks: Centralised services, not centralised data, reduce risk and cost.
- Build trust: A secure, shared ecosystem enables rapid rollout of multiple products.
- Design for extensibility: The same framework can support future API-based services with minimal additional investment.
- Deliver at pace: With the right vision and partnership, regulatory innovation can be delivered in record time.
A Blueprint for Digital Banking Innovation
New Zealand’s Confirmation of Payee rollout is more than a technology project – it’s a new standard for how regulated industries can deliver secure, scalable, and cost-effective services at speed.
With over 95% of consumer bank accounts now protected and a model built for the future, New Zealand has set a benchmark for the world to follow. This achievement was only possible through the deep partnership between obconnect and Raidiam, combining world-class technology, delivery expertise, and a shared commitment to innovation.