Mortgage Business | 2 July 2019
The financial services sector has officially ushered in the first phase of the new open banking regime.
The 2019-20 financial year has kicked off with the launch of the open banking regime, a framework designed to facilitate the open exchange of data in the private sector, beginning with big four banks.
Under the National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018, ANZ, the Commonwealth Bank, NAB and Westpac are required to share credit card, debit card, deposit and transaction account data via a reciprocal data exchange system established by the Australian Retail Credit Association (ARCA) in consultation with the industry.
Mortgage and personal loan products are exempt from the first phase of the data-sharing regime but will be included in the second and third phases, set to commence in 2020.
Another key component of the open banking regime is the Consumer Data Right, which enables consumers to access their own data or direct custodians to share their data with accredited entities – such as banks, telecommunications companies, energy companies and comparison service providers – that have “satisfactory security and privacy safeguards” in place.
Westpac Group has welcomed the launch of the first phase of the open banking regime by voluntarily sharing some of the data via application programming interfaces (API) for the first time.
Jamie Twiss, chief data and strategy officer at Westpac, outlined the bank’s commitment to ensuring customer data is secure and added that the pilot will be “an important step towards realising open banking’s full potential”.
“Westpac is focusing on creating a trusted open banking regime that is secure, flexible and easy to use for all Australians,” Mr Twiss said.
“The pilot program will lay initial foundations to test the performance, reliability and security of the system before any personal consumer data is shared.
“It will also give software developers and fintechs a network of financial institution’s data to build and improve financial services.”
He added: “Data is driving change and transformation across all sectors of our economy, and this will only accelerate.
“Realising the benefits of open banking will depend on the level of confidence that customers have in the platform, and the readiness of businesses to grasp the opportunities it creates.
“We are very supportive of the regime and see it as an exciting opportunity to give our customers more choice and delight them with better banking experiences.”