Imagine buying your morning flat white for $5.50 and having the extra 50 cents automatically added to your KiwiSaver account. Sounds pretty sweet, right? That’s the kind of innovation Open Banking makes possible.

Open Banking is poised to shake up New Zealand’s financial landscape, giving you more control over your money and unlocking new services that make saving and managing finances easier than ever. In this article, we’ll explore what open banking is, the upcoming changes in New Zealand, and what it all means for everyday consumers.

What is Open Banking (and why should you care)?

Open Banking is a system that allows you to securely share your financial data with trusted third parties and authorise those parties to initiate payments on your behalf. Ultimately it is about banks opening up your data and their services (with your permission) so that other innovators can build useful financial tools for you.

Instead of being locked into whatever tools your bank provides, you can mix and match services – using the bank for basic accounts, while using specialised apps for budgeting, payments, or saving. Third-party apps can only access your data or move your money if you consent and grant them access - so you remain in control and you can revoke that access at any time.

There are two key features of Open Banking;

1. Account information sharing means you can allow an app to fetch your banking data (like transactions, balances) to provide insights – think of a budgeting app that automatically tracks all your expenses across different banks.
2. Payment initiation means an app (with your authorisation) can move money for you, for instance paying a bill directly from your account without using your debit card or scheduling an automatic transfer to a savings or investment account.

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Using Open Banking to turn spending into KiwiSaver savings

Feijoa uses open banking to connect to your everyday bank accounts securely, via an intermediary platform called Akahu. This allows Feijoa to see your transactions (with your permission) and initiate small transfers – the building blocks of its service.

Every time you make a purchase with a linked account, Feijoa automatically rounds up the amount to the nearest dollar (or $2 or $5, depending on your chosen setting) and sends the spare change into your KiwiSaver account or the recipients you have configured.

For example, buy that coffee for $5.50 and 50c will be swept into your KiwiSaver account. This happens behind the scenes, effortlessly converting your spending habit into a saving habit.

Feijoa estimates that a 20-year-old median earner in a balanced fund who consistently saves about $2.50 a day via round-ups (and gets the annual government KiwiSaver account top-up) could end up around $60,000 to $80,000 better off in retirement.

Multiply this effect across thousands of Kiwis and you’re looking at a substantial positive shift in national savings; money that not only benefits individuals’ futures but also strengthens the country’s financial resilience overall.

Feijoa’s approach highlights one of the most powerful aspects of open banking: financial inclusiveness. By decoupling KiwiSaver contributions from traditional PAYE contributions, Feijoa opens the door for people who often miss out, such as part-time workers, gig workers, stay-at-home parents, students, or anyone with irregular income.

These folks often find it hard to contribute regularly to their KiwiSaver accounts, and as a result, they don’t get the government’s annual contribution and their retirement savings grow slower.

By plugging into existing banks and KiwiSaver providers, Feijoa acts as a smart layer on top – it doesn’t invest your money itself or replace your KiwiSaver fund; it simply moves your money to your KiwiSaver account in a smarter way.

The future of Open Banking and kiwi innovation

As New Zealand’s Open Banking framework fully rolls out over the next couple of years, consumers can expect to see more convenience and personalisation across fintech services.

You might soon manage all your finances through a handful of apps that talk to all your banks and accounts: one app for payments, another for budgeting, another for saving/investing, all working from the same data pool you have allowed them to use.

For Feijoa, the future looks promising. As more New Zealanders become comfortable with Open Banking and the security and control it applies to both their data and money, Feijoa’s user base can grow and it will bring new products to market leveraging the connectivity of open banking to make saving and investing more engaging and accessible.

Ultimately, the big winner should be you, the consumer. You’ll have more choices, better tools, and a financial system that revolves around your needs and choices. Whether that means saving on fees, getting a better loan, effortlessly growing your retirement fund, or simply having all your financial info at your fingertips, open banking will bring a new era starting 2025.

With companies like Feijoa leading the charge, even your small change can turn into big gains. The way we bank and save is changing for the better, and it’s an exciting time to be a Kiwi consumer ready to reap the benefits of Open Banking.  

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