Intro

Akahu provides a simple way to connect your bank account to a broad range of third party products like PaySauce, Solo, and Tiger Brokers.

We provide enduring account connectivity with all major banks in New Zealand, with the exception of BNZ.

That's about to change. In the coming weeks, we'll start providing enduring account connectivity for BNZ customers. These connections will be via "mobile APIs" and "screenscraping", and this post explains why.

3 options for bank connectivity

We use 3 different methods to interface with the banks. Here they are, starting from our least preferred method:

1. Screenscraping: This method involves logging in via the web apps of the banks. It's not ideal, because we need to store your username / password if you want ongoing data feeds or payments. We don't currently use this method for any ongoing connections with banks.
2. Mobile APIs: This method uses the APIs that power the mobile apps of the banks. It's better than screenscraping, because we don't need to store your username / password (even for ongoing data feeds or payments), but you still need to share your login credentials in order to create the connection.
3. Purpose-built APIs: This method uses APIs that banks have built intentionally for third parties to use. It's the optimal connectivity method because you authenticate directly with your bank (so you don't need to share your login credentials).

BNZ's purpose-built APIs

The banks have been promising APIs for years. Progress has been glacial though - here's the current state of "API-readiness" of each bank. To BNZ's credit, they have greater API-readiness than the others.

BNZ's current API functionality only meets the requirements of around half of our app customers, so these purpose-built APIs are a backwards step for the ecosystem in terms of functionality. But we want to support the use of purpose-built APIs where possible, and 18 months ago we started working with BNZ to agree on contractual terms.

Over 7 weeks ago, the contract was finally in agreed form, and "ready for inputting into DocuSign to send for signing".

We asked BNZ if this was certain enough to announce to our customers, and the answer was "yes". So we told everyone to get ready.

We also went ahead and met our contractual obligations:

• Becoming a member of API Centre and paying the membership fees.
• Paying $23,526 for specific cover to meet BNZ's insurance requirements.
• Paying for third party certificates that are required for BNZ's technical implementation.

Frustratingly, BNZ has still not signed the agreement or provided access to the APIs, and has given no explanation as to why. All we've heard is that there are "other priorities", and they're not sure when they'll sign the agreement.

Falling back to mobile APIs and screenscraping

In parallel with the negotiating the contractual terms, we've had 15 of our app customers pre-approved by BNZ so they're ready to go when the contract is signed. Some of these apps have been waiting to launch until BNZ APIs are available (the four Aussie banks represent around 85% of retail customers, so it's a significant gap if one of them is unavailable).

We've also had messages from many BNZ customers who are frustrated that they're unable to use various products that require bank account connectivity.

So we've decided that we need to carry on with other access methods for the time being. This isn't so bad - these methods are used extensively in New Zealand (BNZ itself uses screenscraping extensively in its supply chain for home loan origination). But it's a shame, because this was an opportunity to use the optimal method of account connectivity.

Promoting competition and innovation

In 2019, the Government wrote an open letter to the banks regarding their slow progress with the development of APIs. The pace remained slow, and in 2021 the Government announced that it will develop Consumer Data Right legislation which will dictate API requirements for banks. That legislation will also remove the need to arrange contractual terms with each bank. So in a few years, these issues will start to fade.

In the interim period, we remain keen to arrange contractual access with any bank (or other financial service provider) who is ready with a functional suite of APIs.

Final words

To all the BNZ customers and our app customers that have been waiting for up to 18 months - thanks for your patience, and sorry for the continued delays. We'll be in touch in the coming weeks to confirm when BNZ connectivity is reactivated.