Oops: Akahu says open banking could help tackle banking mistakes and scams, but New Zealand is lagging. Photo / RainStar, Getty Images
Oops: Akahu says open banking could help tackle banking mistakes and scams, but New Zealand is lagging. Photo / RainStar, Getty Images
You’re moving house, have much on your mind, and come Friday afternoon, need to make the first payment on your new place.
Three days later, the property agency is furious and a complete stranger is hundreds of bucks richer because, it turns out, you entered one digit wrong in thepayment.
Preventing that kind of mishap and tackling banking scams are some of the challenges Kiwi fintech start-up Akahu hopes to meet.
The company has already rolled out technology letting customers of big banks use financial account data in third-party apps.
Akahu co-founder and chief executive Josh Daniell said New Zealand was behind other countries with regard to a range of new security and verification measures.
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“In Australia, CBA has just started with what they’re calling name-check technology. If they know who the recipient is, because they’re in the CBA network, they can serve up the details. In New Zealand, we don’t have that yet at the bank layer.”
Akahu has raised these issues in the context of open banking, which allows third-party services to access banking transactions and data from banks.
Proponents of open banking say it enables secure inter-operability in the banking industry and delivers consumer benefits such as lower transaction fees, more choice and more competition.
Akahu co-founder and CEO Josh Daniell says New Zealand is behind other countries on some new consumer banking security and verification measures. Photo / Supplied
“Another is invoice fraud, generally where someone tries to intercept communications and send an invoice which looks real but is going into a malicious actor’s account.”
To prevent these crimes, open banking could include checks scrutinising a buyer or payer’s account and asking: “Have you paid into the account before? Does the email look legitimate?”
Akahu said it had 35 companies using its technology in commercial settings.
Daniell said the company was staying focused on the New Zealand market for now.
He said the Ministry of Business, Innovation and Employment (MBIE) became its first Government customer at the end of last year, using a service called Business Connect.
The ministry said Business Connect enabled companies to engage and share information with the Government and apply for services.
Daniell said MBIE could potentially create a central register for company bank accounts to speed up account verification.
In practice, that might help a person such as a new tenant ensure they’re paying rent to the right agency.
He said some banks were keen to embrace open banking, and others were waiting for regulations to kick in.
“Within every bank, there are people that embrace open banking and people that resist it.”
In November, the Government said it would take two years to implement open banking under the consumer data right (CDR) framework.
That irritated some open banking backers, such as Simplicity chief executive Sam Stubbs.
But the New Zealand Bankers’ Association has said banks need time to build quality products for consumers, and were already inundated with regulation demands.
Daniell said ultimately, consumer demands might tip the balance in favour of more open banking as people grew wary of getting scammed and more keen to avoid banking mistakes.
“There is going to be increased pressure for that to happen.”
