Australia Stepping Closer to Open Banking
The Australian Treasury has announced an independent review into open banking in Australia. Open banking will require banks to share product and customer data with customers and third parties with the consent of the customer. The Government previously announced that the open banking regime would be introduced in 2018 to help customers seek more suitable products and increase competition.
The review will make recommendations on the most appropriate data sharing model, and regulatory and implementation frameworks as well as include an examination of:
- the scope of data sets to be shared;
- parties who will be required to share, and be provided with, the data sets;
- data transfer mechanisms;
- issues and risks such as customer usability and trust, security of data, liability, privacy safeguard requirements and enforcement of customer rights;
- costs of implementation.
The review is also required to have regard to the Productivity Commission’s final report on Data Availability and Use which was published in May 2017 to which the Government is yet to respond. The report recommended creating a new Data Sharing and Release Act which:
- gives individuals and SMEs a new comprehensive right to:
- view, request edits or corrections, and be advised of the trade to third parties of consumer data held on them similar to current rights under the Privacy Act; and
- have a machine-readable copy of their consumer data provided either to them or directly to a nominated third party;
- implements a structure for data sharing and release that would allow access arrangements to be dialled up or down according to the different risks associated with different types of data and uses.
Other jurisdictions such as the UK and the EU have already introduced open banking regulations which will come into effect from January 2018.