Australians will be able to unleash the power of their own data to compare and switch banking products as the Morrison Government officially launches the Consumer Data Right today.
Following the successful implementation by the four major banks of the IT infrastructure needed to enable the Consumer Data Right in banking, “Open Banking” will now commence in relation to deposits, transaction accounts, credit and debit cards.
Open Banking is a game changing reform for Australians and will revolutionise the way that consumers and small businesses use their data to compare prices and switch between products and providers in the banking sector.
The Government has been working closely with the four major banks, the FinTech industry, the ACCC and Data61 to design, build and test the rules and infrastructure that will allow consumers to securely direct their banking data to another major bank or accredited FinTech provider.
FinTechs that become accredited through the ACCC will be able to connect into the system and with a consumers express consent, be able to use the latest technology to analyse their data and help consumers determine whether their banking products are best suited to their needs. As the technology evolves, so will the offerings that FinTechs will be able to provide to individuals and small businesses.
Open Banking will also allow consumers to share their data with other banks to make it easier to compare and switch and get access to the best deal for them.
Importantly, the regime has strict privacy and security protections and allows consumers to control what data is shared, with whom and for what purposes. FinTechs will need to meet stringent standards to become accredited and maintain those standards to remain accredited.
There has been significant interest by FinTechs to become accredited data recipients with 39 providers currently in the process of being accredited by the ACCC.
From 1 November 2020, the range of banking products available under Open Banking will be expanded, allowing customers of the four major banks to access and share their mortgage, personal loan and joint account data. Non-major banks will allow their customers to share their data for each account type within twelve months.
The Government would like to thank the four major banks and Australia’s Fintech community for their commitment and dedication to delivering this significant milestone, especially given the disruption that has been caused by COVID-19.
Today’s announcement complements the formal designation of energy earlier this week as the next sector to be subject to the Consumer Data Right.
The Morrison Government will continue to implement reforms to help Australians harness new technology, create jobs and support the economy’s recovery from the coronavirus crisis.
Further information on the Consumer Data Right is available at www.cdr.gov.au.