This is a huge week for open banking. The government started a report last year, and now it’s been delivered. We’re diving all in this week.
The government is hot for open banking
If you want to read the full report, go nuts. (It’s well over 100 pages.)
Here’s the short story: It basically outlines 50 recommendations about how to make banking more open and freer for customers. Nice. The government’s position is still the same: make data accessible to third parties.
“Granting third-party access to a customer’s data will allow rival providers to offer competitive deals, products that are tailored to individual needs, and enhanced services that simplify the choices customers face when accessing banking services.”
Banks are getting cracked open
They don’t have a choice, really. This new open banking regime will affect 27 new products. Those products include savings accounts and even mortgages. Australia practically runs on real estate, so this could be a massive shake-up.
“The review confirms that much of this data may be already available to customers, albeit not in a format that makes it easy to provide to someone else…It also provides relief for banks by exempting both “value-added” and “aggregated” data sets from the scope of requests.”
It’s all about customers
If you want to drill it down, there’s basically four key takeaways: open banking needs to be competitive, consumer-focused, it needs to create opportunities, and be safe too. Seems fair enough, hey?
“An obligation for a bank to provide the customer’s information to others at the customer’s direction makes sense – both money and information are valuable and the bank would not have either without the customer.”
It all starts on July 1, 2019
Treasurer Morrison reckons this will be “revolutionary”. Fair point – fintechs and non-bank institutions are included too. The most interesting part of all this is that the Government admits open banking could make traditional bank products obsolete.
“This would open up the possibility of peer-to-peer payment platforms that bypass traditional banking platforms, with money transferred simply by sending a text message; and services that integrate multiple accounts from different banks on the one interface.”
That’s our wrap for this week. Thanks for reading – we hope you found it entertaining and informational. We’d love to hear your thoughts on these articles and anything else data related! Email us anytime at email@example.com!
Until next week,
Team Data Republic
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