Changes coming into effect this year will mean Australians are better able to compare prices and switch between products and providers across the banking, energy and telecommunications sectors.
Legislation introduced into Parliament in December will create a Consumer Data Right, allowing individuals to access personal data currently held by businesses.
The first stage of this will be Open Banking which comes into effect on 1 July 2019.
This will give individuals and small businesses the right to access their own data, but also allow them to authorise accredited third parties to access it.
This should mean people’s circumstances will be more accurately taken into account with engaging with providers, for instance when looking to refinance a home loan.
It is also thought better access to data will support more efficient processes for businesses, with savings flowing through to consumers. Improved competition and data-driven innovation will support economic growth and create new high value jobs in Australia.
Poli Konstantinidis, Experian’s executive general manager of credit services & decision analytics A&NZ, said, “It’s imperative that we address the importance of consumer education for Open Banking to succeed. We are asking consumers to give organisations access to some of their most valuable data, so we need to provide them with a solid understanding of this new way of working and demonstrate tangible examples of how it will benefit them in order to build trust in the system.
“Consumers are probably unaware that Open Banking can deliver a much more streamlined and improved loan or mortgage application process. They also probably don’t realise that it could help them save money on their weekly shop, as retailers analyse transactional data and lower their prices on certain products or create personalised offers as a result.
“Consumer awareness campaigns is the answer and I believe these should be implemented soon - not a few months before the July start date as is believed to be the case.”
The reform implements commitments made by the government in response to its review into Open Banking in Australia and the Productivity Commission’s Data Availability and Use Inquiry.
The reforms will be overseen by the Australian Competition and Consumer Commission and the Office of the Australian Information Commissioner, with a new Data Standards Body developing transfer and security standards. High levels of privacy protection and information security will be a core feature of the system.