IRD APIs Transition Project

A Q&A with the MMC Team

When KiwiSaver first went live in 2007, the technology and investment landscape looked completely different. As part of the Inland Revenue Department’s (IRD) five-year long transformation program, an upgrade to real-time APIs was one of their key pillars to deliver a more secure, scalable and responsive interface to the New Zealand investment market. This would mean that IRD could retire their old XML batch-based infrastructure.

This major overhaul impacts all KiwiSaver providers and administrators as their messaging integration with the IRD needed to be re-written to use APIs to communicate between IRD’s internal systems and the applications used by KiwiSaver scheme providers or their administrators. A major benefit of outsourcing your fund administration to MMC is that we have undertaken this significant development project to the benefit of all our clients that we support for their KiwiSaver registry needs.

In close partnership with IRD, MMC have worked hard behind the scenes over the past twelve months to create new MMC API integration middleware along with significant changes to the NeXus platform to interact with the new internal API. This is scheduled to be rolled out in line with IRD’s go-live of 1^st of November 2021. MMC will be issued with an updated IRD compliance certificate upon completion of this work.

Importantly, there is no work that needs to take place by our clients. MMC will manage this transition seamlessly.

We thought it would be worthwhile and interesting for you to hear directly from our experts on what this core infrastructure transition project means to your business and the work involved to date.

Craig Bennett, Head of Development, MMC:

Can you give us an insight into the magnitude of this project and why this is important?

This is a mandatory integration and process change project that impacts all KiwiSaver providers. It represents a major shift to future proofing the architecture enabling fast responses to a continuously evolving investment landscape.

What’s changing?

In summary, these are the most important changes:

• Message exchange format will change from XML to JSON
• Daily (batch) exchange will move to immediate, on-demand messaging via API
• Security will be rigorous and built in enabling secure communication with each interaction
• New message types
• Optional APIs providing enriched information from the IRD

What are the major benefits from an IT perspective?

Moving to APIs provides the following benefits over the old batch-based system:

1. Highly secure transmission of data
2. Improvements to business flow with near immediate message delivery and consumption
3. Reduced lags on membership related processes
4. Automated testing of KiwiSaver ‘life-cycle’ processes
5. Latest cloud technologies employed where possible
6. Improved metrics for message transfer volumes and latency

What are the key benefits our clients will see from the new IRD APIs?

This is a major tech change that will enable us to move from once-per-day messages, where we then had to wait for a day or longer for a response, to receiving replies continuously to some of our queries. For example, when we onboard a new KiwiSaver member, under the current system, an error in their application that we send to the IRD would not be detected until the next day. With the new APIs, some types of errors would be detected almost immediately. Depending on the overall situation and other dependencies, this should result in faster response times.

Data security is a key topic on everyone’s minds at the moment. The new pattern APIs utilise TLS with mutual authentication, as well as message signing to ensure confidentiality and integrity. Leveraging cloud technology and modern infrastructure will make IRD a much safer place to store and transfer data from.

Martin Harvey, Lead Developer, Technology, MMC:

Can you give us a high-level view of the various project phases?

We kicked off the project back in 2020 by reviewing requirements, scope and what the impact would be on our own architecture and design. A proof of concept, build and test followed. In 2021, we have had a dedicated team that have stayed focused on the development and continuous testing with IRD.

What were the major project challenges you faced?

This has been a huge project. We did not anticipate that it was such an integration effort; we initially thought it was just message format changing. The project has required a lot of technology changes on both IRD’s and MMC’s platforms.

How has the interaction been with IRD?

We have been very impressed with IRD. Both in terms of competence and their accommodating approach. This has been a real team effort with excellent communication and daily stand-up meetings. However, there are of course always challenges with different parties involved relying on different architectures and a tight deadline where we have not always been in control of timeline and dependencies. But overall, a successful partnership that has only deepened with this project.

Some of the APIs are optional and some are mandatory. How are MMC managing this?

As we have prioritised the mandatory APIs, we have ensured to leverage our open architectural design to facilitate adding optional APIs easily as a subsequent phase.

Stephanie Bockler, Business Analyst, MMC:

You were leading the testing. What did this involve?

Testing is a crucial part of any migration. We have had lots of interaction between our team and IRD to verify the flows. So far, we have tested more than 140 integration and business scenarios, and it is still ongoing ahead of the upcoming go-live. 

While the focus has been on making sure the correct messages are triggered and exchanged between the IRD and MMC, the process also enabled us to identify bugs and further development required along the way. This has meant more time spent on testing but this is a crucial part of the process and both parties are prepared to put the extra time and effort in to make sure we have a high quality outcome.

At MMC, our quality analysts and quality engineers work closely with developers as part of our squad setup, so we can quickly iterate on bugs or improvements as needed. These can then be quickly deployed to a test environment, so there’s no delays and we can keep moving at pace.

The communication with IRD has been incredibly easy throughout the testing phase and despite lockdown challenges. There has been a great sense of transparency and trust, which both parties have really appreciated.

From a non-tech user’s point of view, it has been exciting to see how clear and easy this new interface is, which we believe will make the interactions with the IRD significantly faster and more efficient.

Renee Tourell, Chief Operating Officer, MMC:

How will these new APIs impact operations?

Over time, it will be faster and easier to interact with IRD, which will smooth out some of our processes and bring further efficiencies to our workflows. For example, returning payments and rejecting refund requests that can’t be matched to people will have faster turnaround times. With this architectural change, IRD will achieve greater velocity in updating their data, which will be both richer and more accurate. This will also enable our clients to do spot checks on data matches directly through IRD, eg to check that address information is correct.

It currently takes up to ten days for a KiwiSaver member to switch schemes. We anticipate that this time frame should be reduced. As we will be able to message IRD immediately, we expect a faster response, faster throughput, and turnaround time for queries should also be reduced.

In summary, this brings processing up to modern standards knowing that the architectural framework will be in place to cater for growth, speed and future market transformation in a secure environment.