On June 13th, C Minds invited key Mexican government officials to participate in “The Australian Approach to Open Banking”, the second Finance Innovation Series of our Keep Up by C Minds initiative for global knowledge exchanges. Our special guest was Scott Farrell, Partner at Wood & King Mallesons, who was also the Senior Reviewer for Open Banking in Australia. He spoke about the country’s view on the open banking topic and their challenges.
In 2017, the Australian government decided to implement open banking and appointed Scott to develop recommendations and policies. He began working on the Report of the Review into Open Banking, completing it in December 2017 with over 50 recommendations. Soon after, the government approved all the recommendations and set open banking to be implemented in July 2019 for bank deposit, credit and transaction accounts. While the requirement to join the data sharing platform only falls upon banks, others can participate in the system if they meet the accreditation standards.
While discussing his role as the principal decision-maker, Scott explained that Australia’s approach would not involve an implementation entity such as the UK´s because the government, banks, and FinTechs should be eager to join the system on their own accord instead of being obliged to. He also pointed out that Australia was making a conscious effort to not limit the benefits of open banking to digital customers. Part of these efforts will include enabling different avenues for consumers to share their financial information with accredited third parties, opening up dedicated call centers and making iPads available in bank branches.
Although much of the conversation has centered around how the use of data can be applied to open banking, it is important to note that, in Australia, it is part of a much wider data sharing regime called the “Consumer Data Right”. It seeks to put customers in control of their data held by companies, from the financial services ecosystem to the telecom and energy industry among others, and allow them to share it with authorised third parties to search for better deals. As part of this effort, Australia will be implementing a Data Centre.
To develop the technical standard of this new cross-sector Consumer Data Right, the government has appointed Andrew Stevens, former head of IBM Australia. He will be chairing an advisory committee of 15 members, made up of representatives from each of the big four banks, some smaller ones, FinTechs, technology companies, consumer and privacy advocates and representatives from the energy and telecommunications industry to ensure an inclusive data sharing regime. The Australian Competition and Consumer Commission, tasked with determining the rules relating to accreditation, authentication and participation in consumer data right regimes and enforcing them, and the Office of the Australian Information Commissioner will attend the advisory committee meetings as observers.
The committee will first be tasked with determining a timetable for banks’ development of new APIs.
MOVING FORWARD WITH OPEN DATA REGULATION
Now that the pieces are falling into place, the process has shifted to ensuring a regulatory structure and addressing potential customer complaints. The Australian Competition and Consumer Commission will act as a supervisor for the data system while an additional two regulatory bodies will set up a customer complaint system and choose which of them will address any grievances.
C Minds will keep its eye on Australia, observing how its government positions itself as an open banking customer, as we continue to learn from the multifaceted ways that countries have tackled this new initiative. We have enjoyed working with international experts, like Scott, as we continue to support the development of a Mexican open banking standard.