The first anniversary of Open Banking is not to celebrate
AMP and G Bank&C Mutual Bank was among lenders benefiting from extensions this month; Newcastle Permanent Building Society, IMB Bank and Macquarie Commercial Banking Products also benefited from more time.
The slow accreditation of start-ups for the open banking system by the ACCC is one of the reasons the Treasury removed the regulatory functions of the ACCC at the end of last year and terminated them. entrusted to the executive government.
TrueLayer, who was involved in building an open banking regime in the UK, said he would refrain from doing business in Australia until he had more confidence in the quality and the scope of the data provided by the banks.
âWe are not seeing the banks hitting their targets and it reduces our confidence that the system will be ready when they say it is,â said Brenton Charnley, director of TrueLayer in Australia.
The Treasury is expected to confirm its position this month on whether intermediaries like TrueLayer are able to sponsor other data recipients. This would see the intermediary hold the insurance and other requirements on the accredited beneficiaries, allowing wider access and participation. The government is also expected to confirm soon whether intermediaries can use bank data to create information for non-accredited parties.
âThe key to making open banking a success is consumer buy-in, but the industry needs to empower Australians to use it first by creating use cases,â Charnley said.
Industry players are also waiting for the government to finalize the consent mechanism for joint accounts. The fintechs want these to be automatically activated for their inclusion in the plan and for a joint account holder to consent to the sharing of data (with the other joint holder notified and having the possibility of stopping it). The Treasury has indicated it is inclined to support this model, but banks and consumer groups are concerned about privacy.
In an effort to stimulate participation of small banks, another intermediary, Adatree, led the creation of a consortium of more than 20 mutual banks and credit unions, creating a test environment for data recipients without large IT teams. to ensure they comply with ACCC Bylaws as they develop data use cases.
âMutuals have approached us and want to use Adatree to make sure their data sharing is up to standard,â said CEO Jill Berry.
TrueLayer said that in the UK – which introduced open banking in early 2018 – it took two years for one million bank customers to use the system, another eight months for the next one million users, and then just over six more months to reach 3 million.
Retirement Pensions, Financial Services and Digital Economy Minister Jane Hume said in a speech last week at a financial brokers event that it was still early days for open banking, and the government expects the number of accredited data recipients “to increase steadily as the deployment progresses.” progress â.
She said the government would respond later this year to 100 recommendations made in the ‘Future Directions for Consumer Data Law’ report – which will expand functionality to enable data recipients to manage banking products and initiate cases. payments – and the Treasury creates a roadmap for the right to be deployed in the energy, telecom and other sectors.
But Mr Charnley said the focus should be on finalizing the policy parameters for the banking sector. âLet’s start with banking first,â he said.
“We need to put our energy into solving the known issues so that we can increase consumer participation.”