The queue only goes one way
When the Customer and Product Data Act 2025 created New Zealand’s open banking framework, it drew a sharp line between two classes of participant. ANZ, ASB, BNZ, and Westpac were designated by law, required to have open banking systems ready by 1 December 2025. Kiwibank got until mid-2026. No application, no wait, no accreditation hurdle.
Fintechs, on the other hand, must apply through MBIE’s accreditation register, navigate four classes of accreditation, verify their identity through RealMe and Business Connect, pay a $2,000 fee, and then wait for processing. The asymmetry is not incidental. It is structural.
And the wait is already longer than planned.
Processing targets are already blown
BusinessDesk reported in February 2026 that Consumer Data Right accreditation applications have increased significantly, with processing times already exceeding target benchmarks. This is before the regime is fully live. Before Kiwibank’s payments deadline. Before the wave of opt-in banks and second-tier deposit takers that MBIE’s own regulatory impact statement anticipated.
That RIS from March 2025 frames the competitive problem clearly: the five largest banks hold 90-95% of registered bank assets, a concentration unchanged since 2007. Twenty-two second-tier banks and 15 non-bank deposit takers hold the rest. Open banking was supposed to crack that open. Instead, the accreditation pipeline is already clogged with a small number of early applicants.
If the system cannot process a trickle, it will not survive a flood.
The incumbents are suspiciously comfortable
When the big banks welcomed the Commerce Commission’s latest open banking transition timeframes in March 2026, that should have been a red flag. Incumbents do not celebrate regulatory timelines that threaten their market position.
The Commerce Commission’s own September 2025 progress report explains why they are relaxed. The Commission found that open banking activity was being driven by the major banks themselves, not independent fintechs. It warned the trend “will not deliver any material enhancement of competition because the major banks would remain in control.” BNZ was specifically named for failing to meet expectations.
Banks were accused of playing a delaying game, hindering independent fintechs and locking in market power. A parliamentary report warned that major banks’ dominance was likely to persist and that reforms risked reinforcing the status quo. Only 4% of bank customers switched banks in the previous 12 months. That is the competitive stagnation open banking was supposed to fix.
Death by a thousand small charges
The accreditation queue is not the only friction point. Under the regulations, banks can charge app developers 1 cent per API call, capped at $5 per customer per month. Nick Houldsworth, co-founder of app developer Prosaic, called it a “new way to rip off Kiwi consumers and stifle open banking innovation.”
For a bank processing millions of transactions, API charges are a rounding error. For a startup trying to acquire its first thousand users, they are a margin killer. Layer on the $2,000 accreditation fee, compliance costs that fintechs described as “lead weights”, and a processing queue that is already exceeding targets, and you have a system that is economically survivable for large players and potentially fatal for small ones.
Australia already showed us how this ends
Digital Identity New Zealand made the comparison explicit in its formal submission to MBIE. Executive Director Colin Wallis warned that “not enough attention is being directed to the reasons behind the slow take-up in Australia.” Australia’s Consumer Data Right launched in 2019 and, after years of burdensome accreditation, produced a fraction of the fintech participation it promised.
DINZ argued that “a broader scope of competitive third-party providers is essential for success” and cautioned against over-reliance on a single identity framework. Consumer NZ chief executive Jon Duffy described the pace as “torturously slow”.
What business owners should actually expect
The promise of open banking was simple: more competition, better products, lower costs. The reality is a regime where banks are in by right, fintechs are in by application, processing is already behind schedule, and the fee structure advantages scale over innovation.
None of this means open banking will fail entirely. But if you were expecting a wave of challenger products competing for your business banking, your payments processing, or your lending terms, adjust your timeline. The banks are building the apps. The challengers are still in the queue.
Sources
- MBIE: Final open banking regulations factsheet (2025)
- MBIE: Consumer Data Right Accreditation Guidelines (2025-12)
- MBIE: Regulatory Impact Statement – Designating the banking sector under the Customer and Product Data Bill (2025-03)
- BusinessDesk: Consumer Data Right applications bust processing target times (2026-02)
- BusinessDesk: Big banks welcome ComCom’s latest open banking timeframes (2026-03)
- BusinessDesk: Open banking’s red tape may stifle lenders’ innovation, fintechs (2025-10)
- MPAMAG: Banks face scrutiny over open banking delays (2025-09)
- NZ Herald: App developer and Consumer say fees will stifle open banking (2025-05)
- Digital Identity NZ: Shaping the Future of Open Banking in Aotearoa (2024-10)
- Law Association: Open banking on the way but don’t hold your breath