Open Banking

The first iteration of Open Banking in Australia – a limited pilot involving the four majors – went live on 1 July 2019.

When fully operational, Open Banking will have a significant impact on all ADIs.

Open Banking – At A Glance

Under Open Banking, customers will be given the right to instruct their existing bank to share their data with other banks and accredited third parties.

As expressed in the Australian Government-commissioned “Review into Open Banking Final Report” (dated December 2017), Open Banking is aimed at giving customers:

  • • more control over their information;
  • • more choice in their banking;
  • • more convenience in managing their money; and
  • • more confidence in the use of their bank data.

For ADIs, Open Banking means that they will – at a minimum – need to have a sufficiently robust application programming interface (API) and data architecture. More broadly, Open Banking will require ADIs to re-examine their: strategies; customers; product offerings; risk-based pricing; data analytics; cyber security; and privacy policies, among others.

Gen Advisory’s view is that all ADIs should consider Open Banking not just as a compliance burden, but a strategic opportunity. Open Banking provides ADIs with an opportunity to identify a niche area of expertise and deliver unique products and services.

Timeline

Critical Dates for ADIs other than the 4 Majors

Critical dates for “other” banking institutions (including mutuals) and accredited data recipients:

  • 1 July 2020: Need to provide access to product, account and transaction data for credit and debit cards, deposit accounts, and transaction accounts.
  • 1 July 2020: Need to provide access to product, account and transaction data for mortgage products.
  • 1 February 2021: Need to provide access to product, account and transaction data for personal loan and other accounts.

Source: The Treasury website. Retrieved July 2019.

Latest Industry State of Play (as at 5 July 2019)

  • • Three out of the four majors – ANZ. CBA and WBC – have publicly released their “Phase 1” product data. This data is available via links on the Consumer Data Standards website.
  • • Data61, the CSIRO unit responsible for setting the Open Banking data standards, continues to consult on the standards.
  • • The Consumer Data Rights bill is currently awaiting passage in the new Parliament.
  • • The Labor Party has recently signalled that they are unlikely to pass the requisite legislation by end-July due to data privacy concerns. If so, this would delay the 1 February 2020 commencement date for the next phase of Open Banking.

Our Research

Gen Advisory’s research to date on Open Banking is displayed below.

Gen Advisory’s view is that Open Banking will ultimately have a game-changing impact on the Australian banking sector. We will continue to monitor developments in this space very closely.

For a glossary of terms and abbreviations relating to “Open Banking”, please click here.
For a list of applicable references, please click here.

How Gen Advisory can help ADIs on Open Banking

Drawing from our toolkit of services, ways in which Gen Advisory can assist Australian ADIs on Open Banking include the following:

  • • Ascertaining the ADI’s current understanding of, and preparedness for, Open Banking.
  • • Delivering bespoke training on Open Banking.
  • • Delivering bespoke research on a specific Open Banking-related area of interest.
  • • Designing an ADI-specific technical assistance programme on Open Banking.
  • • Managing and executing, on an ADI’s behalf, a project on Open Banking.
  • • Drawing from Gen Advisory’s network of FinTech Australia members, partnering with suitable FinTech providers if needed.
  • • Conducting due diligence on prospective FinTech partners.

“Contributing towards a stable and inclusive financial sector."


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