The Australian Government has released the Report of the Review into Open Banking. The Treasurer's speech can be found here and the media release here. The Review provides advice on the design and implementation of Australia’s Open Banking system. It is the first stage in a broader consumer data right which is to include other sectors including energy and telecommunications. I was appointed to lead the Review in July 2017.
Open Banking would give customers a right to direct that the information they already share with their bank be safely shared with others they trust. It is designed to give customers more access to, and control over, their information, leading to more choice in their banking and more convenience in managing their money, and resulting in more confidence in the use and value of an asset mostly undiscovered by customers – their data.
Open Banking is to be part of the Consumer Data Right in Australia, a more general right being created for consumers to control their data, including who can have it and who can use it. Banking is the first sector of the Australian economy to which this right is to be applied and Open Banking is the way that this is to happen. More sectors of the economy are to follow (energy and telecommunications have been announced already) and Open Banking needs to work together with them to form a single, broader framework.
The Report sets out detailed findings and recommendations to many complex and challenging issues. However, four simple principles emerge from it:
- Open Banking should be customer-focussed. It should be for the customer, be about the customer, and be seen from the customer’s perspective.
- Open Banking should encourage competition. It should be done to increase competition for the banking products and services available to customers so that customers can make better choices.
- Open Banking should create opportunities. It should provide a framework on which new ideas and business can emerge and grow, establishing a vibrant and creative data industry.
- Open Banking should be efficient and fair. It should be effected with security and privacy in mind, so that it is sustainable and fair, without being more complex or costly than needed.
These principles of who Open Banking should be for, why it should be done, what it should do and how it should be achieved, are shown in the following interactive diagram, setting how they relate to some key considerations for the Review, and recommendations which have been made. Summaries of the recommendations relating to each of these key questions can be found by clicking on them in the diagram. Hopefully, this will provide a useful introduction to the Review not only to those connected with banking in Australia, but because of the breadth of the Consumer Data Right, those involved in the energy and telecommunications sector, and the data sector more generally.