Today I am pleased to release the Report of the Review into Open Banking, which will guide the Turnbull Government’s approach to giving consumers greater access to and control of their data, as announced in the 2017 Budget.
The Report makes recommendations on the most appropriate model for implementing Open Banking in Australia.
Open Banking will revolutionise the financial services sector, transforming the way Australians interact with the banking system by giving consumers the right to safely share their data with other banks, other institutions and innovative FinTechs and get themselves a better deal.
Granting third-party access to a customer’s data will allow rival providers to offer competitive deals, products that are tailored to individual needs, and enhanced services that simplify the choices customers face when accessing banking services. It should simplify the process of switching between banks and help to overcome the ‘hassle factor’ that sees customers stay with their current bank even in the presence of more competitive deals elsewhere.
Having access to potential new customers’ banking data (with their consent) should enhance the ability of providers of banking services to compete more strongly for new business, delivering cheaper and better‑tailored products for customers. The ability to instruct that their data be shared with competing banks could also usher in a new era of competition in banking for small business customers.
Open Banking will be implemented as part of the Consumer Data Right in Australia, a more general right to data being created across the economy following a recommendation by the Productivity Commission’s Data Availability and Use Inquiry. On 26 November 2017, the Government announced that the Consumer Data Right will be established sector-by-sector, beginning in the banking, energy and telecommunications sectors.
The Open Banking Report makes 50 recommendations in total. It makes recommendations on: the regulatory framework to support Open Banking; what data should be shared and with whom; what safeguards are needed to inspire confidence in data sharing; how data should be transferred; and, how Open Banking should be rolled out.
I thank Scott Farrell and his team for the production of a first-class report, which maps out a practical and sensible model that is positively customer-focused and drives competition, while spelling out strong safeguards that protect customers’ privacy and give Australians confidence in the system.
As it considers the Report and moves towards implementation, the Government invites interested parties to make submissions on recommendations by 23 March 2018. The Report can be accessed and submissions made here.