Australian Treasurer Scott Morrison is set to get an education on open access to credit data from leading British experts, in what may signal changes to come closer to home.
As part of his G20 trip to London, the Treasurer will receive counsel from British finance regulators, entrepreneurs and thought leaders in order to learn more about how data laws can help grow alternative lending and finance.
“I will take the opportunity to hold a number of meetings with a range of experts and entrepreneurs to discuss FinTech and innovation, particularly how improved use of information can deliver benefits for consumers,” Mr Morrison said.
“The UK has recently introduced fundamental changes for major banks to provide customers with greater access to data held about them, and requiring data be made available to third parties.
“Developments in the UK can supplement the outcomes of an inquiry into data availability and use, which is to report to the Government early this year.”
Britain has been a pioneer in relaxing credit data laws. Following an industry report in 2015, the UK Treasury threatened that if financial institutions failed to make their customers’ data available on request in a “portable, electronic format” by 2017, legislation would be introduced mandating that they do so.
Consequently, the UK is moving towards on open banking standard faster than other countries, setting a benchmark for others to follow.
While issuing support for data sharing, the Australian Treasury - unlike the British - has not backed it up with the threat of legislation, leaving the industry to reform itself.
Mandatory data sharing remains politically controversial in Australia and Mr Morrison’s trip comes as the latest jousting.
Late last year, the Productivity Commission, an influential government think-tank, published a draft report arguing against mandatory data sharing—claiming it would be too expensive. But a subsequent parliamentary committee, ignoring the PC, recommended that banks be required to make their customers’ transaction histories available on request.
Major banks, which are the primary opponents of open data laws, have argued that the customer data they hold on record is theirs as they have spent time and resources compiling it. Fintech companies by contrast have claimed that credit data is the property of banks’ customers, who have the right to share it however they wish.
At stake for fintech companies is the ability to make loans more easily as credit data drives their automated decision-making process. For banks, control over data acts as an important barrier to entry that keeps competition, such as fintechs, lower down the food chain.
31 May 2023
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