While the deadline for non-major lenders to make their product data available under the Consumer Data Right has been set for 1 July 2020, the ACCC has granted a three-month exemption due to the COVID-19 pandemic.
The temporary exemption applies to non-major ADIs, including banks, building societies and credit unions, as well as non-primary brand products offered by the major banks. The eligible lenders will now be required to share product reference data – information about its rates, fees and features of banking products – by 1 October 2020.
The big four banks have been sharing this data since July 2019.
“The ACCC is granting these exemptions as an acknowledgement of the intense resource requirements of the industry as a result of the COVID-19 pandemic, and in particular non-major banks that may not be able to prioritise this at this time,” explained ACCC commissioner Sarah Court.
“We understand that financial providers are dedicating many resources at present to support their customers; however, we do encourage providers to share product reference information on a voluntary basis if they are in a position to do so.”
The implementation of open banking has already been postponed once before, to make time for additional testing to ensure security and privacy protections were operating effectively.
Both then and now, multinational consumer credit reporting company Experian has welcomed the ACCC’s decision to delay.
“It’s encouraging to see the ACCC continuing to push ahead with the launch of open banking while consulting with industry to agree to a time frame that’s workable in the current climate,” said Simone Jemmett, Experian A/NZ head of strategy and new markets.
Jemmett highlighted the role that data can play in rebuilding Australia’s economy after the virus is contained.
“There's no doubt that digital channels are more important now than ever, and this will certainly be the case as we start to look ahead to recovery," she said.
“Open banking affords consumers an easier way to share their transaction data with credit providers via open banking APIs, giving them the ability to leverage their fuller financial history to access credit and lending facilities.
“Similarly, it will allow banks to be increasingly transparent about the products and services they offer, as well as enabling innovation that’s directly responsive to the changing needs of their customers.”
However, the possible impact of the new banking system is contigent upon consumer awareness.
“We know from our research, both locally and in the UK, that consumers really know very little about open banking,” Jemmett said.
Experian data shows that nine out of 10 Australians are not aware of how open banking will impact them.
“Its potential to be meaningful is entirely dependent on showcasing the value exchange of data sharing,” Jemmett emphasised.
“This exchange will take on a new meaning post COVID-19, when the financial landscape will look very different to what we would have anticipated at the outset of 2020.”