From Compliance Burden to Client Value: Why Insurance Needs its Own ‘Open Banking’ Moment

If accurate, up-to-date policy information could flow directly into adviser CRMs via secure APIs, advisers could produce client reviews and recommendations far more efficiently, writes financial adviser Anna Cuming. She believes there’s an opportunity for a coordinated, industry-led approach to move toward a more standardised way for insurers to share data – something loosely modelled on open banking, but designed specifically for life insurance…

 There’s a bit of a disconnect in financial advice at the moment. Not in intent, most advisers I know genuinely want to do the right thing by their clients, but in how our time is actually spent.

At the recent Financial Advice New Zealand Conference, I found myself having the same conversation over and over again with insurers: Why can’t our systems talk to each other better?

The idea isn’t complicated. If accurate, up-to-date policy information could flow directly into adviser CRMs via secure APIs (Application Programming Interfaces) we could produce client reviews and recommendations far more efficiently and with a lot more consistency across providers.

Instead, many of us are still manually pulling together information that already exists somewhere else. We’re checking it, reformatting it and double-checking it again – not because it adds value, but because we have to. It’s become part of meeting compliance standards.

But here’s the tension: Just because something is required doesn’t mean it’s the best use of time.

…Every hour spent chasing or cleaning data from the different insurance companies is an hour not spent sitting across from a client…

Every hour spent chasing or cleaning data from the different insurance companies is an hour not spent sitting across from a client, understanding what actually matters to them and helping them make better decisions. That’s where the value is. That’s the job.

There’s also a more practical friction point that often gets overlooked – and that’s access.

Within advice businesses, support staff play a critical role in delivering good client outcomes. Yet the way some insurer systems are structured makes that job harder than it needs to be.

Some providers do this well, where an admin team member can securely access all relevant client information across advisers in one place. Others require multiple logins tied to individual advisers, creating unnecessary complexity, duplication and delays.

It’s a small thing on the surface, but it adds up quickly. And importantly, it’s fixable. Before we even get to fully integrated APIs, improving how adviser businesses, not just individual advisers, access information would remove a meaningful layer of friction almost immediately.

There’s a risk we don’t talk about enough: As compliance expectations rise, we start to confuse being busy with being valuable. More process, more admin, more checking. It  feels productive but it doesn’t necessarily lead to better outcomes for clients.

…There’s an opportunity here for a coordinated, industry-led approach…

So what’s the alternative?

One option is to think a bit bigger as an industry. There’s an opportunity here for a coordinated, industry-led approach, potentially through Financial Advice New Zealand, to move toward a more standardised way of sharing data – something loosely modelled on open banking, but designed specifically for life insurance.

It doesn’t need to be perfect from day one. Even agreeing on a basic set of data standards and formats would make a noticeable difference. It would reduce duplication, cut down errors and smooth out a lot of the friction that currently sits in the advice process.

And importantly this kind of collaboration isn’t unprecedented.

Banks compete hard for customers every day. But behind the scenes, they work together through Payments NZ to keep the payments system running smoothly. That shared infrastructure hasn’t reduced competition. If anything, it’s made the whole system more efficient and reliable.

…Compete where it counts, on product, service, and pricing, but collaborate where it removes unnecessary friction…

The insurance industry could take a similar approach. Compete where it counts on product, service, and pricing, but collaborate where it removes unnecessary friction.

The closest comparison is what’s happened with open banking in places like the United Kingdom and Australia. In the UK, the Open Banking Implementation Entity has driven a standardised API framework that allows banks and authorised third parties to securely share customer data (with consent). Australia has taken a similar path through the Consumer Data Right.

That’s where it gets interesting for us, because those frameworks have started to move beyond banking.

In the UK, there’s active work toward ’open finance‘ (sometimes called open insurance as part of that), where the same concept applies across investments, pensions and insurance. It’s not fully there yet, but the direction is clear: Standardised data sharing, client consent at the centre, and APIs doing the heavy lifting.

…Some insurers and platforms have built integrations that allow advisers to pull policy data directly into their systems…

On the insurance-specific side, parts of Europe are a step ahead operationally. Under the Insurance Distribution Directive and broader digital initiatives, some insurers and platforms have built integrations that allow advisers to pull policy data directly into their systems. It’s not universal, and often still fragmented, but it proves the model works.

Of course, there are real considerations to work through. Data privacy, security, and client consent aren’t small issues. But they’re also not new ones. Other parts of financial services have already shown these challenges can be managed with the right structure and oversight, in collaboration with the Financial Markets Authority.

So the question becomes less about if it’s possible, and more about whether we’re willing to prioritise it as an industry.

…Even small steps in this direction would have a real impact…

Because even small steps in this direction would have a real impact. Less time spent on admin. More consistency across advice. And more capacity for advisers to focus on what actually matters.

At its core, this isn’t really about systems or APIs. It’s about where we choose to spend our time and whether the way we work is genuinely serving our clients as well as it could be.

Right now, I think there’s room to do better. The real question isn’t whether it’s possible. It’s whether the industry, Financial Advice NZ and leaders from the insurance companies here decide it’s worth doing, because once you’ve seen how much time it gives back to advisers, it’s hard to justify not moving in that direction.