The Consumer Data Right legislation, that will enact open banking will be seen by parliament this week according to the Treasurer.
The legislation which will enable the consumer side of open banking to go through was put on hold with the dissolution of parliament prior to the election in April.
At the start of July, the big four banks entered the open banking trial with the launch of product data with the time line expecting them to have consumer data ready for next year.
The fintech industry has urged the government to pass the legislation with fears that legislation will not be passed in enough time for implementation.
These fears were stoked by Assistant Minister for Financial Services Jane Hume who said the bill needed to be passed this week to give the sector enough lead time.
Labor meanwhile urged caution around rushing a data bill which could see the government’s legislation delayed.
The government has said that the reforms will encourage competition leading to better prices for customers and more innovative products and services.
“This initiative has already seen major improvements in the levels of transparency over the terms and conditions of a wide range of banking products, with three of the four major banks voluntarily launching the first stage of the Consumer Data Right on 1 July 2019,” said Treasurer Josh Frydenberg.
Mr Frydenberg said the next stage, due for a February 2020 launch will give consumers greater access to their personal information stored by the banks, with progress to the launch well on track.
“Progress to the February launch is well advanced. The ACCC will issue the ‘lockdown’ version of the rules governing the system by the end of August; and the interim Data Standards Body has, in the last week, issued the implementation draft of the technical standards,” he said.
Mr Frydenberg said consumer control over data would support better price comparisons and promote more convenient switching between products and providers.
“Improved access to data will also enable the development of better and more convenient products and services, customised to individuals’ needs,” he said.
The announcement by the government was welcomed by the ABA whose executive director of policy Christine Cupitt said it was a critical step to ensure the system was safe and secure for all Australians when launched.
"Giving customers greater access to their data will make it easier and simpler to shop around for a better deal on a credit card, followed by home loans and other banking products...Passing this legislation is an important step to setting up a safe and secure system," she said.
General manager of FinTech Australia Rebecca Schot-Guppy said she was pleased to hear that the consumer data right rollout was picking up pace.
“We believe this reform's impact on the financial services sector will be exponential and transformative. It is a key building block for fintechs looking to create new services that enhance competition and improve financial literacy,” she said.
The rollout was the first hurdle of what would be a long process said Ms Schot-Guppy but consumers would benefit from the right once it reaches its full potential.
“If the UK experience is anything to go by, the consumer data right and open banking policies will require ongoing support and promotion for them to realise their potential,” she said.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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