The Australian government wants to phase in open banking

The federal government has released an issues paper calling for a gradual approach

The Australian government would like to phase in open banking. 

Open banking has taken another turn with the Australian government releasing a new issues paper on Thursday, in which it said it will consider phasing in an open banking regime.

Open banking is where consumers and bank customers can force their bank to give their credit history to a competitor, in search of a better deal. Open banking, it is hoped, will increase competition in the financial sector.

FinTech Australia, the peak body for Australia’s fintech industry, welcomed the issues paper and said it supported a phased in approach to open banking.

“This paper provides further clarity about key issues that need resolution in order for us to proceed with this important and long-awaited reform to improve consumer choice and banking competition,” said FinTech Australia CEO Danielle Szetho.

“In particular, FinTech Australia is interested in further discussing the possibility of a phased introduction of the regime to ensure its timely implementation, and we will be working closely with our members to gather their perspectives on how this might work.”

The paper – which called for submissions and feedback – also said it would consider other forms of implementation besides a gradual phase in.

Open banking regimes already exist in several other countries, with the UK usually taken as the benchmark. Other countries like Singapore – a fintech rival with Sydney – have committed to phasing in open banking in the near term.  

“The Review will engage broadly with industry to identify ways to achieve the Government’s objectives for Open Banking whilst minimising the costs of implementation,” the paper said.

Submissions will close on 22 September.