Ben Rose: Is seven-day banking something to celebrate?

From late May, banks will offer the ability to carry out transactions seven days a week, moving from the current five-day-a-week model. Photo / Colin Anderson, Getty Images, Fil

OPINION

Here’s a quick trivia quiz for you: In which decade did New Zealand banks move to seven-day payment processing?

A. 1980s B. 1990s C. 2000s D. 2010s.

The answer is E). None of the above. Because New Zealand banks only figured out how to process payments seven days a week this year.

It doesn’t kick in till next month, and even then, it won’t be available 24/7 but only during a 16-hour daily window. And settlements still won’t happen dynamically, instead being processed in batches every 30 minutes.

I, along with every other Kiwi who saw the announcement, found it less remarkable that they’re finally implementing seven-day processing than the fact it has taken them till 2023 to get there.

In fact, most remarkable is that they saw fit to announce it.

Illustration / Rod Emmerson

You’d think this is the textbook example of a milestone you want to quietly usher in the back door so the public don’t realise just how far behind the times the industry is.

So what if I told you there was already a global payment ecosystem that propagates updates in real time across a decentralised global network? And that infrastructure has been operating for more than a decade, increasing in sophistication, resilience and use cases, despite significant naysayers and institutional opposition?

And that in 2023, the most recognised currency in this new ecosystem has outperformed almost all asset classes globally, against a backdrop of global recessionary fears, rampant inflation and major bank failures?

But let’s be real. I probably don’t need to tell you that, because everyone who’s paying attention is aware that while traditional finance stutters, Bitcoin is in the midst of an incredible bull run, and in the butchered words of Mark Twain: reports of the death of crypto have been greatly exaggerated.

This dynamic is worth paying attention to. We’re living through a moment where traditional financial institutions are being stress-tested by the modern world. The information environment is evolving rapidly, and the architecture of our legacy financial systems is straining to keep up.

As an example of the entrenched forces of entropy dragging at the heels of our legacy financial institutions, see this comment from Steve Wiggins, chief executive of Payments NZ, in the wake of the banks’ recent announcement: “For a lot of banks, the business day definition has tended to be a bit hardwired in – both at the central bank and retail banks, as well. There’s been a lot of change, although it sounds straightforward it never tends to be. It has been a big job for the industry to enable that capability and put the operational support in behind it as well.”

So e-banking has existed for decades now, and we’re hearing the banks couldn’t process a payment on weekends because they couldn’t quite grasp that the internet continues to exist outside working hours.

We are going to see more of this.

Ben Rose. Photo / Supplied

Over the next few years as technology becomes more and more immersive and intuitive, we are going to see more and more instances where Kiwis’ basic expectations of how financial service providers should meet their needs run counter to how our existing institutions are designed to deliver.

Many forward-thinking New Zealanders I have the privilege of working with are incredibly excited by this. We have the opportunity to innovate, to deliver a freer, faster, more inclusive financial ecosystem to all Kiwis. As the world speeds up, I don’t believe Kiwis will stand for big players dragging the chain.

So to the banks: congratulations on this milestone. Don’t stop there, and don’t slow down, lest the world pass you by.

- Ben Rose is General Manager of Binance Australia, New Zealand and Pacific Islands.