Westpac NZ Enhances Personal Loan Processing with Open Banking Tool
Westpac NZ has launched an innovative open banking tool that streamlines personal loan applications, significantly reducing processing times.
Improving Loan Applications
Westpac New Zealand has taken a significant step towards modernizing personal loan applications by launching an automated tool powered by open banking. Russell Jones, head of data and AI at Westpac NZ, noted that the bank is witnessing a substantial rise in open banking activity.
The new feature allows customers applying for personal loans through the bank's digital platform, Westpac One, to automatically categorize transaction data from their Westpac accounts. Additionally, applicants can upload statements from other financial institutions with ease.
Faster Processing Times
Before this innovation, applicants had to manually input and categorize their financial data, a process that could take around 25 minutes, according to Jones. With the introduction of the new tool, Westpac has successfully reduced the average application time by about 25% across an initial group of 500 applicants.
Looking into the future, Westpac NZ aims to further enhance customer experience by enabling funds to be available in just one hour for those who meet the bank's lending criteria. Currently, the standard processing time is between one to two days, a common timeframe throughout the industry.
Collaboration with Fintech
The open banking tool was developed in collaboration with Akahu, a New Zealand fintech firm specializing in open finance and banking solutions. Westpac NZ’s Red Bird Ventures holds nearly 36% of Akahu, making it the company’s largest shareholder. Josh Daniell, co-founder of Akahu, emphasized the benefits of using open banking to obtain accurate financial data. This method not only streamlines the application process for borrowers but also enhances data accuracy for lenders.
“Providing precise data improves the speed and reliability of the loan application's outcome,” said Daniell.
Increase in Open Banking Activity
Open banking enables individuals to securely share their financial information with trusted third-party services via application programming interfaces (APIs). Since December 2025, regulations have mandated the four largest banks in New Zealand—ANZ NZ, ASB, BNZ, and Westpac NZ—to facilitate secure data sharing. Kiwibank, the fifth largest bank, completed its open banking rollout in May.
According to Jones, Westpac NZ has experienced a dramatic increase in open banking usage. In the previous month, users initiated over two million secure account information requests through APIs, marking a 46% increase compared to the month before.
Simplifying User Experience
Daniell expressed that the regulated open banking framework launched last December has streamlined access for financial institutions and customers alike. In the past, applicants were often required to enter their bank credentials into third-party services, creating a potential breach of trust. Now, applicants simply log into their bank through a secure portal, making the process smoother and more secure.
This transition to regulated open banking sets a precedent for the industry, pushing other banks to innovate and improve service offerings. Daniell stated, “Westpac NZ’s lead in this domain could inspire further developments across the banking sector.”
Future of Open Banking in New Zealand
The Consumer Data Right (CDR) framework governs open banking in New Zealand, which is expected to evolve to include other sectors such as regulated open electricity. The government shifted oversight of open banking standards to the Ministry of Business, Innovation, and Employment (MBIE) to provide a unified regulatory environment.
Jones acknowledged that having a single agency like MBIE overseeing standards is beneficial for the industry, fostering cooperation among all stakeholders—banks, fintechs, and consumers alike.
Regulatory Changes Driving Innovation
Daniell referred to the recent changes as a transformative moment for open banking, emphasizing that the departure from a bank-led model to a regulated framework will promote competition and stimulate innovation across the industry. New Zealand’s rate of onboarding new open banking apps and services has significantly increased since the regulatory shift.
In comparison to global standards, New Zealand's open banking adoption rate is outpacing countries like the UK and Australia, showcasing the nation's quick adaptation to new technologies and customer needs.
