Independent inquiry into open banking data revealed
(24 July 2017 – Australia) Australian federal treasurer Scott Morrison has revealed plans for an independent review into open banking to advise the government on the best way to open up financial data to consumers.
In a statement, Morrison said open banking will provide Australians “greater access to their own banking data.”
King & Wood Mallesons partner Scott Farrell has been appointed to lead the review, which is due publish its finding by the end of 2017.
“Mr Farrell has given many years of service to the public and private sector in advising on, and guiding, regulatory and legal change in the financial sector,” said Morrison.
“He has intimate knowledge of the financial technology sector and is a member of the government’s FinTech Advisory Group.”
The move will benefit small smaller industry players such as fintechs and challenger banks, as customers will be able to easily switch between providers.
Morrison said that such a scheme would “mean more choice and cheaper and better options for consumers”. At the federal budget in May, he set a goal to get a system up and running next year.
The review will take in advice from the private sector, including banking, consumer advocacy and fintech representatives to develop its final recommendations.
FinTech Australia chief executive Danielle Szetho said, “We believe Scott will bring a pragmatic, forward thinking and balanced approach to the process, with a firm eye toward the consumer outcomes the inquiry seeks to realise.”
Although in the past, Australia’s major banks have been cold on open banking measures, saying it would impact security and privacy issues, the Australian Bankers’ Association said the banks no welcomed the open regime “provided that customer security and privacy needs are paramount”.
“This inquiry is a crucial step to identify and resolve the legal and technical challenges in open banking,” said Tony Pearson, executive director at industry body.
Pearson added that in principle the banks supported open banking, but it was important to get the design right.
“It will take a shared effort between banks, governments and fintechs to address issues like ensuring customer privacy is protected, their data is secure and knowing what to do when something goes wrong.”
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