Bayly AndrewCUSTOMER AND PRODUCT DATA BILLFirst ReadingHon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I present a legislative statement on the Customer and Product Data Bill.SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon ANDREW BAYLY: I move That the Customer and Product Data Bill be now read a first time. I nominate the Economic Development Science and Innovation Committee to consider the bill. It is a pleasure to be introducing this bill. The Customer and Product Data Bill paves the way for greater competition in the banking and electricity sector two sectors that touch the lives of every New Zealander. Our coalition Government is 100 percent committed to creating a more dynamic and prosperous economy. A crucial part of this is encouraging competition with a view to fostering innovation and lowering consumer prices. This bill sets up a framework which will make it easier and more attractive for entrepreneurial start-ups to challenge big established players first in the banking sector and secondly in the electricity sector.Later there will be opportunities to apply to other sectors such as to communications. The ultimate goal is to provide Kiwis with greater choice. Choice about who you bank with and who you get your electricity from. Choice about how you manage your finances and what technology plan you sign up for. Choice is freedom and when customers have choice businesses have to compete.Innovation is fostered as businesses are encouraged to create and invest in new products and services. There are some fantastic examples of innovative products that exist overseas which are not available here in New Zealand because we don't yet have a consumer data right in place. For example many of the big Australian banks offer 10-minute online home loans to the Australian customers. Yet here in New Zealand the same customers of the same banks have to go through a lengthy manual process to get a mortgage. New Zealand has some of the world's most profitable banks. Our four big banks are Australian-owned and the fact that they make bigger profits in New Zealand than at home speaks to the lack of competition. We also have high electricity prices and it isn't easy for most households to compare plans and work out how to adjust their energy use to save money. I'm very pleased to say that this bill lays the foundation for open banking and open electricity which will have a transformative effect on competition and in turn likely lower consumer prices. At its most basic the bill sets out a framework for data to be safely and simply accessed and shared.Modern businesses like banks and electricity companies hold masses of data about your usage and you in particular. You can request your data but there is no requirement for them to give you this data quickly or in a useful and digestible format. One of my very clever officials who actually worked on this bill told me how she spent a whole year trying to work out the best electricity plan for her family. She had to download the raw data and put it into an Excel spreadsheet code it and manually work through all the various plans on offer. Eventually she worked out that a plan that offers free power on the weekend would be the most economical for her family and while I applaud her due diligence this is not a realistic thing that we expect of normal people to do. Overseas there are apps that can do this for you and this bill lays the groundwork for them to operate in New Zealand.When customers have access to this kind of information companies can't hide behind slick promotional deals and advertising campaigns. Customers will be better able to make informed decisions and compare services. The terms open banking" and "open electricity" are a little misleading. They make it like there are no guard rails or they've been removed and there's some kind of data free-for-all. This is not the case. In fact data privacy and security will improve.The bill is supported by the Privacy Commissioner and complements existing protections in the Privacy Act. I expect minimum security requirements to be set for each sector in regulations that follow this bill. Right now New Zealand has no mandatory data standards for businesses. Many businesses operate complicated out-of-date systems that put customers at risk. Some businesses have popped up that offer customers the kinds of services I have mentioned but with no safe data right they rely on a practice called screen scraping which is risky. It is a practice that essentially asks customers to provide a third party your log-in details so they can access your bank data. This breaches bank terms and conditions and means if something goes wrong you have little protection.The data-sharing framework is entirely opt-in meaning that customers must first give their explicit consent for their data to be shared. There will be rules to make sure that data requests are expressed in simple terms so that customers can understand what they're signing up for. To participate in the regime businesses will have to be independently accredited and to show that they meet the security standards. And there will also be a customer verification process. Banks will have to verify that it is you making the request not an impersonator. I want to stress that the Government will play a limited role in this regime.We're kick-starting the transformation and establishing the legal and regulatory framework. I've been working with the Commerce Commission to make sure we're making good progress on developing the APIs or the standards that set the rules for transferring data. And while it is important that we set some rules and standards to ensure safety is not trumped by commercial interests the Government will not collect or hold any customer data nor will we participate in data-sharing arrangements unless explicitly requested by you the customer.The question is who supports the bill? Well honestly basically everyone. Many people have advocated for a consumer data-right regime for years. Just a few weeks ago the OECD recommended that New Zealand introduce a consumer data-right regime.It is also supported by consumer advocacy groups and by industry including banks. Because while we expect this bill to eventually lead to more competition for these entities they are also excited about the fact that they will be able to develop products and services for their customers. They will also be able to develop labour-saving productivity enhancing tools like the 10-minute online mortgage application process I spoke of earlier.It will also support businesses accessing capital by giving lenders a more accurate picture of a business's financial health. Even our colleagues across the aisles support it and I'd just like to acknowledge previous Commerce and Consumer Affairs Ministers who have worked on this bill. It has been in train for a long time and I'm really pleased that there's cross-party support. I'd argue that it's been in train for far too long. There's a lot of fatigue out there because people have been waiting so long for this to actually happen. So I'm really pleased that this Government is progressing this legislation within a few months of coming to office.But nonetheless it would be remiss of me not to acknowledge and thank former Ministers for their work. It is also my hope and intention that we work together to get the best outcomes for New Zealanders in this area which stand the test of time and set us up for a bright and prosperous future.Finally I'd like to provide some international context. Most of our international partners who we compare ourselves to already have put in place or are in the process of putting in place a consumer data right just like this one we are doing today or are making steps to deliberately accelerate open banking. Australia the UK the EU Canada and the US are some examples and probably the most successful one is actually in Brazil. New Zealand has been comparatively slow. Recent reports say there are as many as 300 companies waiting for open banking to become a reality. So we know that there are smart businesses queuing up to bring products to the New Zealand market.The advantage of our slow start is that we've been able to learn from others' mistakes. Open banking has been slow in Australia. I've met with the person that drafted the legislation and what we have done is we've observed what has happened and learnt from this and adapted our framework so the same won't happen here. [Bell rung]"