Open Banking Enters New Phase
(1 July 2021 – Australia) The roll out of Open Banking has entered a crucial new stage in Australia with all banks and credit unions expected to share basic data with consumers and registered data holders as of 1 July.
Importantly many lenders remain exempt, delaying wide scale data sharing for another year until at least 2022.
Non-major authorised deposit-taking institutions (ADIs) will now be required to join the Big Four majors as data holders under the consumer data right (CDR) scheme. As data holders, financial services providers are initially beholden to share data on savings and transaction banking information, as well as credit and debit cards as requested by customers.
The Big Four have been sharing this consumer data under phases one, two and three of the scheme since Q1 2021 after first joining the CDR in July 2020. But even as the CDR enters its next phase, only a handful of tier two lenders have currently signed on as data holders, with the remainder delaying their entry in some instances by up to 18 months.
A challenge some groups have faced is the requirement that each joint account holder authorise the sharing of data before it can occur. Only nine data recipients are currently accredited to access data, including CBA, Frollo, Regional Australia Bank, Ezidox, Yodlee, Adatree, illion, and Intuit.
In addition to the Big Four, nine additional ADIs and their respective subsidiaries have become data holders. Regional Australia Bank, Tyro and Up have carried this out applying fintech Frollo’s open banking platform, which is also used by the big four.
“We expect around 15-20 data holders to be ready in early July, meaning around one in three are still to come on board” stated Frollo CIO Tony Thrassis.