Open Banking set to expand rapidly as new rules kick in

by Mike Wood05 Jul 2021

The peak body for fintechs has welcomed planned changes in legislation that could see Open Banking in Australia advance rapidly.

The Federal Government has expanded the number of institutions to whom the Consumer Data Right (CDR) legislation applies. They had previously pledged $1.2 billion in the Federal Budget to assist the CDR rollout.

Previously, only the Big Four were included in the initial legislation, which was enacted in July last year and came into effect in February 2021.

Now, all data for home and personal loans is from non-major ADIs is to be shared if requested, meaning that customers can more easily change banks, refinance mortgages and change lenders.

Some banks have applied for an received exemptions, such as ME Bank, while others are to participate: AMP, Bendigo and Adelaide Bank and Tyro will all now be subject to CDR.

Fintechs are likely to be among the biggest beneficiaries, as they become a much more valuable proposition to customers when their data can more easily be shared.

“FinTech Australia welcomes the release of the draft rules on access and joint accounts,” said Rebecca Schott-Guppy, CEO of FinTech Australia. “These draft rules on access have been made in extensive consultation with FinTech Australia and the broader fintech ecosystem.”

“While the fintech industry is keen to expedite the CDR rollout, ensuring there is a framework that protects consumer data is paramount for the sector. The fintech industry has consumers' best interests at heart, as we know that trust is fundamental to the CDR rollout if we’re to see the mass adoption of new open banking powered services.”
“We believe this policy, based on our recommendations, strikes this balance of speeding up the rollout and protecting data. Use of intermediaries is the fundamental shift in the UK’s Open Banking system that led to expedited creation and rollout of new financial services.”

“It saw adoption of this technology grow exponentially. When the rules come into force, we expect Australia to follow a similar path.”