Consumer data right

The Government has decided to establish a consumer data right in New Zealand to give individuals and businesses greater choice and control over their data.

What is a consumer data right?

The term ‘consumer data right’ describes a mechanism for consumers to securely share data that is held about them with trusted third parties. The third party could be another product or service provider or a separate entity such as a fintech. The data would be shared in a machine-readable format so that it can be utilised by the third party for the consumer’s benefit.

A consumer data right will provide significant benefits for consumer welfare and economic development. Over time, it will give individuals and businesses access to a wider range of products and services, reduce search and switch costs, facilitate competition, encourage innovation, increase productivity and help build the digital economy. A consumer data right will also strengthen existing privacy protections by giving consumers greater choice and control of their data.

Aotearoa New Zealand’s consumer data right

On 5 July 2021, the Government decided to implement a new legislative framework for a consumer data right. This will allow consumers to securely share data that is held about them with trusted third parties, using standardised data formats and interfaces.

The consumer data right will be rolled out on a sector-by-sector basis, with the Government designating individual markets, industries and sectors to which it applies. Primary legislation will create the overarching framework of the consumer data right, introducing basic obligations that will apply to those within a designated sector. Designations will specify the type of data that is covered and the functionality that is enabled. For example, if the banking and financial services sector were designated, this could apply to specific data such as bank account information and transactions. More detailed obligations will be set out in rules and data standards.

Security and privacy of consumer data is vitally important. To protect the security of data transfers, consumer privacy and commercial confidentiality, third party data recipients will need to be accredited and a range of information protection safeguards will be introduced.

Consumer consent and control of their data is central to the consumer data right. Consent must be express (i.e. through a clear opt-in), informed and time-limited, and consumers must be given the ability to review and amend or withdraw consent at any time. Consent for any purpose beyond providing the goods and services the consumer has requested must be optional.

Consumers will be able to consent to:

  • read access – the ability for an accredited person to read consumer data
  • action initiation – the ability for an accredited person to carry out an action with the consent of a consumer.

Action initiation will allow consumers to, for example, ask a third party payment provider to action a bank funds transfer from the consumer’s bank account to a business’s bank account when paying for a goods or services.

Next steps

In early 2022 the Government will make further decisions about the implementation of the consumer data right. This will include decisions on which institutions have a role in implementation and developing rules and standards, and measures for enforcing the consumer data right. The Government will also consider which sectors should be assessed first for the potential application of the consumer data right.

We expect that a Bill implementing the consumer data right will be introduced to Parliament in 2022.

Cabinet paper, Cabinet minute and regulatory impact analysis

The Government’s decisions on a consumer data right and the supporting analysis is set out in the following documents:

Discussion document

In August 2020, MBIE released a discussion document on options for establishing a consumer data right in New Zealand. Consultation on the discussion document closed on 19 October 2020.

Read the discussion document

Further information

In 2019, the previous Minister of Commerce and Consumer Affairs engaged with the industry to advance sector-led open banking initiatives.

Read the letter to New Zealand banks (or ‘API Providers’) [PDF, 281 KB]

Read the Minister’s speech at the launch of the Payments New Zealand API Centre(external link) – Beehive website

Find out more about our work on regulating the retail payment systems.

Last updated: 29 November 2021