On 9 May 2018, the Australian Government confirmed their decision to establish an Australian Open Banking regime and implement the recommendations set out in the Farrell Report titled “Review into Open Banking in Australia”. This follows the Government’s report into Open Banking released in February 2018 which broadly supported the creation of a new data-sharing regime in the financial services industry. The Australian Government has set aside roughly $45 million over four years to develop the creation of a Consumer Data Right which includes the establishment of the Open Banking framework.
Under the regime, Authorised Deposit-taking Institutions (ADIs) will be required (on request) to provide its individual and small business customers and other third parties (with the consent of the customer) with access to their data.
The Open Banking regime will be implemented in three stages over the next 2 years. Under the Government’s projected timeline, all major banks must make the following available to its customers:
- data on credit and debit card, deposit and transaction accounts by 1 July 2019;
- data on mortgages by 1 February 2020; and
- data on personal loans and all other products by 1 July 2020.
All remaining (non-major) banks will have an additional 12 month extension on the above timelines to comply with the Open Banking regime. Further, the Government has given the Australian Competition and Consumer Commission (ACCC) the power to adjust the timeframes as they see fit.
Following this announcement, the ACCC in consultation with the OAIC will develop draft rules for Open Banking while the creation of data and security standards will be developed by CSIRO’s Data61. Fintech bodies, including Fintech Australia have pushed for these developments and will continue to push for its implementation.