After a comprehensive of the regime, the results are in on Open Banking.
The Australian government has today released the results of its review into Open Banking, after the country announced it would like to “phase in” the regulations in August last year.
Australian treasurer Scott Morrison MP commissioned the review as part of the government’s 2017 Budget, seeking to make recommendations for the “most appropriate model” for implementing Open Banking regulations.
The final report, which makes 50 recommendations in total, was carried out by Scott Farrell, a partner at King & Wood Mallesons, and his team. These recommendations cover topics such as the regulatory framework, the type of banking data involved, security measures for consumers and how their data will be transferred and managed, as well as any further issues that may arise.
However four core principles were identified as integral to the review:
Open Banking should be more customer focused
This means that customers should provide banks with explicit consent to share their data, with participants being required to maintain a record of all data transfers.
Open Banking should encourage competition
It is hoped that as a result of the regime, a more competitive banking environment will come into fruition. This should stimulate both the economy, and financial innovation. Better access to data will allow customers to make more informed choices from a wider variety of options, which may also allow the cost of service to decrease while security levels improve.
Open Banking should create opportunities
Farrell hopes that any future iteration of the regime should include “a framework on which new ideas and business can emerge and grow”, with regulations not just limited to existing financial structures.
Open Banking should be efficient and fair
This means that the regime as a whole should be carried out with security in mind, without becoming more complex or costly than required. For example, data should be transferred free of charge, with notifications and requests to customers limited to a single screen.
In addition, all Open Banking APIs will be built in accordance with the Australian Data Standard Setting Body, and be legislated through the Competitive and Consumer Act of 2010.
The regime is currently set to be fully rolled out by 1 July 2019, with Australia’s Big Four banks to supply at least 50 per cent of new credit data by the new financial year, and 100 per cent of data by the regime’s release date.
The full Treasury report is available here.