The big four banks had until July 1 to make product data available on all credit and debit card, deposit and transaction accounts. Other products will follow.
By February, first-time mortgage data should be available, and all products will eventually be available to major banks by 2020. July 1, 2020 is the start date for all other banks to begin offering their credit and debit card product data with an end date. of 2021.
Customer data will be included in the scheme by 1 February 2020, giving consumers more full control over their data and enabling greater transparency and competition across the sector.
Open banking has spread across the world, with the most relevant example for Australia being the UK’s open banking regime.
The United Kingdom introduced its own following a revelation of poor practices, much like Australia. What is different, however, is that the UK regime applies to only nine banks, while Australia’s will apply to all ADIs.
The Australian regime only grants read-only access to data, with reciprocal obligations and a possible plan to open it to other sectors, such as public services.
This will ultimately mean that a bank’s customers will be able to request or give consent for their data to be shared with an accredited third party, such as a bank, financial services provider, utility provider or telecommunications provider .
The scheme will remove the barriers consumers face in finding the best banking products and eventually switching to that provider.
“We have worked hard with regulators and other industry stakeholders to ensure the success of the Consumer Data Rights Regime, in particular to build consumer confidence in the use and exchange of their data.
“The first step is to publish product information via an application programming interface (API) from July 1, 2019. This will enable easier comparison of banking products from financial institutions and allow the industry to test the APIs before sharing consumer data next year,” she said. said.
Ms Crous said developers can now access information on how to integrate CBA APIs.
Westpac head of data and strategy Jamie Twiss said data security was crucial and the pilot was an important step.
“Westpac is focused on creating an open and trusted banking system that is secure, flexible and easy to use for all Australians. The pilot program will lay the initial groundwork to test the performance, reliability and security of the system before consumers’ personal data is shared. It will also provide software developers and fintechs with a network of financial institution data to create and improve financial services.
Westpac will provide generic product data information today, which will include interest rates, discounts, eligibility criteria, product features and descriptions, and fees and charges.
“This is a complex change for the industry and the timelines are challenging, but we strongly believe that speed should not compromise security and customer experience; Getting it right is paramount to consumer confidence and trust in the system,” NAB said.
The spokesperson said NAB had actively started developing processes since 2017 to be ready for open banking and would continue to work with Data 61 and ACCC.
Fintech Answer
Luke Bunbury, deputy chief executive of neobanks Volt, said this would mean incumbent banks will have to innovate to compete with new entrants.
“This means that incumbent banks will need to innovate to compete, as there will be a long line of fintechs and neobanks like Volt that want to leverage this data to provide their customers with a superior banking experience.
“Customers will own their data, and third parties will need to earn it by being innovative and trustworthy,” he said.
Part of it was changing the narrative by offering life improvement and not just selling products, Mr Bunbury said.
“Volt and other innovative banks will be able to help Australians find and get better deals on a range of banking and even non-banking services, like utilities and travel.
“By enabling data sharing between financial institutions, it will also be possible for customers to manage multiple bank accounts from a single mobile application, whether or not the accounts are held with competing banks,” he said. he declared.
Verrency chief executive David Link said the scheme would ultimately drive greater innovation.
“While July 1, 2019 will not radically change the way Australians bank – as only product data, rather than customer data, will be available until February 1, 2020 – it will is a big step towards much more transformative change,” said Mr. Link.
Banks should start offering a personalized offering to consumers, Link said, and those that are nimble will thrive.
“Effective use of data and access to new value-added services will gradually become a major decision-making factor for consumers when it comes to choosing or changing who owns their relationship.
“Banks that don’t take this very seriously will gradually find it difficult to remain competitive. On the other hand, those who take steps to become more agile – particularly in their ability to create value around the consumer relationship – will thrive in the post-open banking landscape,” he said. .
