Open banking in Australia: Treasury’s report assesses best ways to share data

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A generic picture of a woman working in an office sitting at her desk typing on a computer.
A generic picture of a woman working in an office sitting at her desk typing on a computer. Reuters/Catherine Benson

The federal government’s report on open banking has some recommendations on implementing a data sharing framework in Australia. The Treasury’s report assessed the best ways for financial institutions to share data and allow customers to better compare products and services.

Australian Treasurer Scott Morrison has released the report on the open banking review, which was conducted by King & Wood Mallesons partner Scott Farrell. It includes 50 recommendations on how and what data can be shared and transferred and to who.

The report also contains recommendations on the best regulatory framework. When customers have better access to their own data, it would mean improved choice in banking.

In the foreword, Farrell said that the report focuses on how open banking should be implemented. But it was also “worth sparing a moment to consider what open banking could mean in the future.”

“Improving the control, choice, convenience and confidence of customers should, in the longer term, create a customer-centric data sector which generates growth and employment and, importantly, value to customers by increasing the safe and efficient access to data,” he wrote. Open banking is tipped to inspire new products, services and skills, which are expected to be in demand not only locally but also overseas.

Morrison explained the benefits of allowing access to data. “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,” Morrison said in a statement.

The Farrell report recognises both the opportunities and challenges of data sharing. The Australian Bankers’ Association (ABA) has welcomed the report, which it recognised as something that focuses on customers and its commitment to design a safe and secure data sharing framework.

The ABA said banks will continue to work alongside stakeholders such as consumer groups, FinTech’s, regulators and government. It reportedly looks forward to carefully analysing Farrell’s report and addressing any challenges with members and stakeholders to ensure success.

The report is also welcomed by startups. Neobank Xinja chief executive Eric Wilson said he “applauded” the Treasurer for moving the country towards an open banking system, Investor Daily reports. He believes it is time for Australians to have access to this kind of technology, and that it will benefit consumers who will have access to better and more tailored products.