1.1 Summary and background

The API Centre and the Business working group initially set out a draft implementation guidance and policy document for how the industry should adopt open banking in New Zealand, with a focus on applying the principle of equivalency to scenarios where a bank account has more than one signatory. 

The key scenarios covered are:

• Joint accounts

• Accounts that require more than one signatory to authorise a payment

1.2 Equivalency principle and approach

The nature of the equivalency principle is to align open banking joint account and multi-authorisation scenarios with each respective API Provider’s other practices.  While there will be a reasonable degree of similar practices across all API Providers, there will also be some differences.  The equivalency principle approach aims for an internally consistent customer experience within an API Provider, and it intentionally does not aim for standardised uniformity across all API Providers.  This is consistent with the approach taken by the U.K’s Open Banking Implementation Entity.

Over time and if it makes sense to do so, the Equivalency Principle approach may be replaced by best practice guidelines, standards, rules or new compliance obligations.  These might be developed to support good outcomes for New Zealand’s open banking ecosystem, customers and stakeholders; to provide certainty in scenarios where there is no clear equivalent practice or precedent; or to comply with future Consumer Data Right obligations.  Should a more standardised approach be taken in the future, care would need to be taken to ensure that competition law is complied with when developing any industry agreed common rules/standards for API Providers’ customer authorisation practices in open banking scenarios.

However, this Equivalency Principle approach does not extend to setting a standard, as it ensures practices  are anchored in each API Provider’s respective bank terms and conditions and the established account holder’s Account Operating Authorities over the account.   Further, in open banking scenarios where there is no directly equivalent practice to draw from and no standard, the API Provider is free to establish their own internal practice.