By Tess Bennett
Smaller financial institutions have been granted a three month extension to prepare for their role in Australia’s open banking regime but the July 1st start date remains in place for the major pillars of the launch of the Consumer Data Right (CDR).
Following consultation with stakeholders, the ACCC has extended the deadline for non-major ADIs to share product reference data from July 1st to October 1st in response to the disruption caused by COVID-19.
The temporary exemptions apply to non-major ADIs, including non-major banks, building societies and credit unions, and extend to non-primary brand products offered by the major banks.
The major banks have been sharing product reference data since July 2019 and the deadline from them to share phase 3 Product Reference Data for their primary branded products will remain 1st July 2020.
A managed rollout of the scheme — essentially a controlled go-live process — is scheduled to take place in May and June so a robust system is up and running before the official launch of CDR on July 1, 2020.
The timeline for sharing consumer data remains unchanged, which requires the big four banks to share consumer data relating to credit and debit cards, deposit accounts, and transaction accounts by July 1st. Data sharing on mortgages and personal loans will be required on November 1st.
In an email sent to participants last Friday, the ACCC acknowledged the need to allow financial institutions to work with their customers to respond to the economic impacts of the present crisis as well as plan for the future.
“We also recognise that the Consumer Data Right is an essential development for Australia’s future digital economy, and that digital channels are more important than ever in the current environment,” Paul Franklin, executive general manager of the ACCC CDR division wrote.
“Following consultation with industry stakeholders, the ACCC is continuing to progress the Consumer Data Right for the commencement of consumer data sharing in July 2020 while looking to provide some flexibility as authorized deposit-taking institutions (ADIs) and Initial Data Recipients respond to the physical and economic impacts of COVID-19.”
Product reference data includes information about a bank’s rates, fees and features of banking products. This data can be used by businesses, such as comparison sites, to compare products in the market.
The ACCC said, ADIs that are in a position to commence sharing product data earlier than 1 October 2020 can choose to provide data voluntarily at any time, as is currently the case, and are encouraged to do so.
“The ACCC is granting these exemptions as an acknowledgment of the intense resource requirements of the industry as a result of the COVID-19 pandemic, and in particular non-major banks that may not be able to prioritize this at this time,” ACCC Commissioner Sarah Court said.
“We understand that financial providers are dedicating many resources at present to support their customers, however, we do encourage providers to share product reference information on a voluntary basis if they are in a position to do so,” Court said.
Experian, which provides tools and services to lenders and their customers that enable open banking, has welcomed the ACCC’s commitment to the current open banking timeline.
“It’s encouraging to see the ACCC continuing to push ahead with the launch of open banking while consulting with industry to agree a time frame that’s workable in the current climate. There’s no doubt that digital channels are more important now than ever, and this will certainly be the case as we start to look ahead to recovery,” said Simone Jemmett, Experian ANZ’s Head of Strategy & New Markets.
Experian is working to bring its UK-based open banking platform to Australia.
“While we know from our research, both locally and in the UK, that consumers really know very little about open banking – in fact, 9 in 10 people here don’t know how it will impact them – its potential to be meaningful is entirely dependent on showcasing the value exchange of data sharing. This exchange will take on a new meaning post-COVID-19 when the financial landscape will look very different to what we would have anticipated at the outset of 2020.”
“What open banking affords consumers is an easier way to share their transaction data with credit providers via open banking APIs, giving them the ability to leverage their fuller financial history to access credit and lending facilities. Similarly it will allow banks to be increasingly transparent about the products and services they offer, as well as enabling innovation that’s directly responsive to the changing needs of their customers.”
