The Government is "making life easier" for banks and other financial institutions by sharing New Zealanders' personal information with them but Privacy Commissioner Marie Shroff is satisfied privacy will not be compromised.
Internal Affairs Minister Nathan Guy said yesterday that the Government would introduce legislation this year allowing private sector access to Internal Affairs' new data validation service.
The service was developed as a way of proving identity and had been trialled by other Government agencies, "and now Cabinet has agreed to let private sector organisations use it as a way of confirming identity and reducing costs", Mr Guy said.
"This service allows users to enter the information they hold into the data validation service website, which can immediately confirm whether it is consistent or not with other personal details held by the Department of Internal Affairs. This can include details on citizenship, passports and births, deaths and marriages databases and registers."
The service would help financial institutions comply with laws on money laundering and the financing of terrorism.
Mr Guy said the Government was mindful of privacy concerns and the records would not include sensitive information such as income, travel details or criminal records. Users would need a customers' permission to make the checks.
"The data validation service will be available only to organisations which meet strict security, privacy and integrity criteria."
Ms Shroff said the programme involved personal information being shared with multiple agencies "so it's very important to properly manage people's privacy concerns".
"The data validation service is intended to make life easier for businesses and for individuals without exposing them to privacy risks. So far we are satisfied that it appears to be on the right track, and we will be keeping closely involved with its development."
A spokesman for Mr Guy said the push for private sector access did not come from the banking sector, but was an "example of the department trying to be innovative". Banks and other financial institutions would pay for the service "on a cost-recovery basis".
- ADDITIONAL REPORTING: NZPA