How New Zealand's Consumer Data Right Will Transform Open Banking

Jamie Leach, Raidiam’s Open Data Strategist, looks at how New Zealand’s Consumer Data Right legislation is set to transform the country’s Open Banking landscape.

New Zealand is making significant strides in financial services with the advancement of its Consumer Data Right (CDR) legislation. The Customer and Product Data Bill was granted Royal Assent on 29 March 2025, completing the final stage in the legislative process. The Bill is now the Customer and Product Data Act.

The Act establishes a Consumer Data Right (CDR), marking a pivotal moment for Open Banking in New Zealand - giving consumers greater control over their data, fostering innovation, and driving competition in the financial sector.

Commerce and Consumer Affairs Minister, Scott Simpson, described the legislation as a game-changer for Kiwi consumers, stating:

The days of manually searching the internet for the best electricity plan or painstakingly going line by line through months of bank statements when applying for a mortgage, could soon be over. Using your own data shouldn’t be that difficult, and it won’t be in the future.

What is New Zealand’s Consumer Data Right (CDR)?

The CDR framework aims to give New Zealanders greater control over their personal data, enabling them to share it securely with accredited third parties. For banking customers, this means seamless access to innovative services such as:

• Budgeting tools that provide real-time financial insights
• Faster loan approvals without manual paperwork
• Secure payment solutions without sharing login credentials

To ensure consumer protection, the legislation introduces penalties for non-compliance, reinforcing data security and trust.

How the CDR Impacts Open Banking in New Zealand

Recent Developments

The Customer and Product Data Bill has made significant progress in recent months:

• Second Reading (March 6, 2025): Parliament unanimously passed the bill following amendments by the Economic Development, Science and Innovation Committee. These changes addressed concerns around consumer benefits, penalties for non-compliance, and lessons learned from Australia’s CDR regime.
• Royal Assent (March 29, 2025): The Bill officially became law as the Customer and Product Data Act, establishing the Consumer Data Right in New Zealand.
• Implementation Timeline: Open Banking regulations under the CDR are set to take effect by December 2025.

What This Means for Open Banking

Open Banking will be the first sector designated under New Zealand’s CDR framework. This means banks will be required to implement APIs and electronic systems that allow consumers to securely share their banking data with third-party providers.

The result? Greater competition in personal banking services and more opportunities for fintech startups to innovate.

Unlike previous voluntary Open Banking initiatives led by Payments NZ, the CDR will enforce standardised data-sharing protocols across all banks. This shift is expected to simplify processes for fintechs while enhancing consumer trust and security.

Minister Simpson underscored the significance of this development by stating:

We’re putting the power back into the hands of those who own the data: consumers. I am excited to see the competition, choice, and innovation that this will unleash.

Lessons from Global Open Banking Initiatives

New Zealand has taken note of challenges faced by early adopters of Open Banking, such as the UK and Australia. Minister Simpson acknowledged that in some markets, adoption has been slower than expected due to unmet expectations.

By implementing a structured and measured approach, New Zealand aims to avoid these pitfalls and ensure the framework delivers genuine value to consumers.

New Zealand has been paying close attention to the lessons learned by early Open Banking adopters like the UK and Australia. That’s clear in the way it's taken a more deliberate, staged approach — one that prioritises consumer outcomes and builds in safeguards from the outset.

But there’s still work to do. International experience shows that robust Open Banking ecosystems don’t just emerge from legislation alone — they rely on things like a clearly defined Trust Framework, a dedicated implementation entity to drive momentum, and sustainable funding models to keep the wheels turning. While New Zealand has laid strong legislative foundations, it’s these next steps that will ultimately determine how effective — and enduring — the regime becomes.

What Are the Benefits of New Zealand’s CDR?

The introduction of Open Banking under the CDR framework opens up a range of possibilities:

• Innovation: Fintechs can develop tailored solutions that cater to specific consumer needs.
• Competition: Greater competition can lead to better financial products, lower fees, and improved customer service.
• Consumer Empowerment: Individuals will have greater control over their financial data, enabling smarter decision-making.
• Data Security: Strict compliance requirements ensure consumer data remains protected.

How New Zealand is Already Driving Financial Innovation

Beyond Open Banking, New Zealand is already taking steps to enhance financial security and trust. Raidiam is delighted to be working with obconnect on the delivery and operation of New Zealand’s Confirmation of Payee (CoP) initiative for the New Zealand Banking Association.

This initiative was driven by Minister Andrew Bayly, who prioritised protecting New Zealand citizens from the rising threat of fraud and scams. By introducing a nationwide CoP solution, the country is ensuring that payments are sent to the intended recipients, reducing fraudulent transactions and aligning with global best practices for financial integrity.

Our Trust Platform, Raidiam Connect, is enabling this ecosystem by setting up and configuring both production and sandbox environments - ensuring secure, reliable data-sharing infrastructure. Working alongside obconnect, we successfully delivered this solution in just four months, allowing customers to start realising the benefits quickly.

With New Zealand now laying the foundation for secure, trusted financial data sharing, we can’t wait to see what they’ll achieve next.

What’s Next for Open Finance in New Zealand?

New Zealand’s Consumer Data Right legislation is more than just a regulatory milestone - it’s a step toward a more inclusive and competitive financial landscape. As the December 2025 deadline approaches, banks, fintechs, and regulators will need to work together to ensure a smooth and effective rollout.

With a well-structured framework in place, New Zealand has the potential to set a global benchmark for Open Banking - one that prioritises consumer empowerment, security, and innovation.

Interested in learning how we’re delivering trusted data-sharing ecosystems in New Zealand and globally? Contact us today to learn more!