(10 January 2018 – Australia) The Productivity Commission will use its upcoming review of competition in the financial sector to maintain pressure on the Australian government to launch one of the world’s first open-data financial systems.
The commission’s review of competition in the financial system follows its recent review of the availability and use of data in the economy, which urged the government to allow consumers to trade their customer data so companies can offer better deals.
In July 2017, Treasurer Scott Morrison asked King & Wood Mallesons partner Scott Farrell to model how the government could implement an open banking regime in Australia. Mr Farrell’s report was due by the end of last year but the government has not released it.
“The government is considering the report and will be looking to release and respond shortly,” a spokeswoman for the Treasurer said.
According to reports, the push for an open data platform will form a key plank of the Productivity Commission’s review of competition in the financial system. Farrell had also consulted with the Productivity Commission several times while preparing his open banking report to Mr Morrison.
The Productivity Commission’s draft report is due to be released shortly after Australia Day, with a final report due midyear.
More data in the hands of competitors to the major banks will allow them to better assess risk and potentially offer deals at better prices than those of larger companies, which hold most customer data. According to Morrison’s new rules, banks will be required to have 50 percent of their credit data ready for reporting by the start of July, increasing to 100 percent a year later.
The commission has also previously asked for a national data custodian to license organisations to release data to trusted groups. The House of Representatives economics committee recommended aggressive timelines for an open access regime for customer data through application programming interfaces.
Some banks have already adopted APIs to share customer data. Macquarie is rolling out an open banking platform for retail customers, while ANZ is bringing business customers on to its own APIs.