With New Zealand’s late-blooming Open Banking scheme on the horizon, local financial services organisations have considerable work to do to advance data maturity and data privacy consciousness, with the country lagging fellow OECD nations, according to Sonya Crosby, chief data officer at Westpac New Zealand.

Speaking at the Future of Financial Services New Zealand 2022 event, Crosby called on New Zealand industry and consumers to progress data maturity, as advances in data-hungry technologies, including machine learning and artificial intelligence, and growing concerns around data ethics, particularly on consent and purpose, complicate consumers’ and organisations’ relationship with personal data.

Sufficient data awareness will prove critical for consumers to engage with, trust, and take advantage of the country’s forthcoming consumer data-sharing (or Consumer Data Right) regime.

“As Open Banking and open data come towards us at pace – and I know other countries are already there – are we educating our customers and ourselves on that purpose and what could happen?”, Crosby asked.

“Do our consumers really understand what’s happening with their data?”

“Once the data is moved, that’s their information, that’s them: that’s their patterns, that’s their behaviours, that’s all of their lives being shared with other people. Do they understand that, and do they understand how to manage it in the best way?”

New Zealand, though hardly the last advanced economy to adopt a consumer data-sharing scheme, is a relative latecomer to the Open Banking family, with the UK, Australia, the EU, South Korea, Japan and Singapore now actively operating some form of CDR scheme. The Ardern Government is set to introduce legislation this year to implement an open data-sharing regime (to also be known as the ‘Consumer Data Right’).

Crosby emphasised the significant work at hand for financial services “to help people understand” not only the potential use cases for, but also the value of, their data.

However, New Zealand has considerable advantages at its disposal to advance data maturity, she said, praising the local industry’s willingness to “move fast” and collaborate.

“We’re small enough and smart enough and we’re very attractive as a nation to be able to bring talent together. That’s a huge advantage for us.

“We can do this. It’s not rocket science.”

Citing a recent McKinzie survey on the global average benchmark for data maturity, she noted that New Zealand went from “below average to exceeding the average” within just 12 months.

“We can use those lessons learned for what hasn’t worked elsewhere, take the good stuff, leapfrog [everyone else], and away we go.”

Data governance ‘sets us free’

While risk and innovation are often seen as sitting at opposite ends of the spectrum, for Crosby, well-established data guardrails – that is, data governance frameworks – provide financial services businesses with a powerful impetus for innovation.

Good governance, according to Crosby, will ensure organisations act and deliver services in the interests of customers.

“If you’re doing the right thing by customers and you’ve got your guardrails in place, and you’ve embedded it into your controls by design then, you can get on with it. It set you free.

“And, if you’ve got the right understanding, if you’re using it well, then you’re doing the right thing by the customer, that’s what the regulations are all about.”

Good governance empowers banks to make good decisions and take calculated risks, she added. Being a bank, taking risks “is what we do”, she said. “That’s how we make money.”

“You take a risk on people and use guardrails to make good decisions. That’s what data governance is all about.

“We [see] it as a value piece that actually unlocks value instead of something that might stop you from doing things.”