Expert disappointed open banking at least two years away

A major shakeup to the banking sector is on its way, with the Government announcing it is working to introduce open banking.

But Kiwis will be kept in the banking dark ages for another two years despite one expert saying it could be brought in immediately.

Open banking has been described as a revolution, with Australia, the European Union, the United Kingdom and the United States all doing it.

But down here in New Zealand, many Kiwis don't know what it is. However, the Government's about the change that. 

Open banking means you'll be able to give permission for banks to share what is basically the coding behind your data. You'll be able to switch banks more easily for better rates. It also blows open the market to competition which drives rates down.

"This will be revolutionary in the long term for New Zealanders - it'll save them a lot of money," said Simplicity chief executive Sam Stubbs. 

But Stubbs is disappointed as it's anticipated the work to implement it will take two years.

Because most of our banks are Australian and already do open banking, Stubbs said the Government should just bring it in now.

"If they don't, it's going to cost New Zealanders about two to four billion dollars in excess fees over the next two years."

But Commerce and Consumer Affairs Minister David Clark said there's a lot of work to do.

"We need to have an accreditation regime in place, we need to have a registry, we need to have monitoring, we need to have a disputes resolution process. There are a range of technical details that need to be worked through also with the banks."

Roger Beaumont from the New Zealand Bankers' Association said it's "really important to get it right because if you get it wrong there are some serious implications".

There's also been another win for consumers on Thursday. The Gift Card Expiry Bill was pulled from the biscuit tin, Aotearoa's way of randomly deciding legislation.

The Bill will mean parliamentarians will now have to debate whether to ensure gift cards don't expire.

"My Bill actually means consumers who are losing about $10 million a year will be able to utilise that to buy goods that they have paid for."

Meanwhile, Kiwis will have to wait another two years for the gift of open banking.