Another definitive step has been taken towards creating a “more innovative and customer focused” banking industry within Australia. Last week, the senate passed the Consumer Data Right (CDR) legislation, creating the legal foundation for open banking, which will require banks to make customer data available to competitors.
The Australian Banking Association (ABA) dubbed the passage a “win,” with CEO Anna Bligh providing clarity as to the timeline of implementation. She expects the ACCC to issue the "lock-down" version of the rules governing the system by the end of August.
“Following the passage of the legislation and the ACCC guidance on the rules, the industry, together with regulators, will begin rigorous testing to ensure the system is safe for Australian bank customers to use,” she said.
“The industry will continue to work with the government in the final stage of the introduction of Open Banking to deliver a system which both increases competition and ensures data is kept secure,” she added.
According to John Moran, Salesforce AVP of financial services, the passing of the CDR legislation marks the “beginning of a new era of competition” in Australia.
“The banking sector's focus on compliance has meant many providers haven't fully appreciated the opportunities available to transform their value proposition for customers and prospects,” he said.
"It [will be] the financial services providers which focus on developing new data-led services and products, backed by an ecosystem of complementary partners, which will grow and gain market share."
Rebecca Schot-Guppy, GM of FinTech Australia, not only called the passage of the legislation a “key step” in the open banking process, but applauded that it delivered more certainty around its implementation.
She said, “This is a broader win for consumers. While fintech will be one of the first industries to benefit from this reform, we see it having a lasting impact on competition in Australia.”