Open Banking Review released in Australia
The Australian Government has released a report (Report) on the Review into Open Banking in Australia. The Report is the product of the Open Banking Review, commissioned to advise on the most appropriate model for Open Banking in Australia. It follows the release of a similar report in the UK in 2016 which has since resulted in preparations to roll out Open Banking in the UK beginning this year.
A full copy of the Report is available here.
What is open banking?
Open Banking is a framework which allows consumers to control the data that banks collect from them, including who can have it and who can hold it. Open Banking will enable the consumer to direct that a bank transfer data it holds about him/her/it to a third party, in a usable machine readable form. It is considered that this could release the value of that data to consumers and open up banking innovation and competition. It has been heralded that Open Banking will transform the banking sector.
Why is the Report of interest to New Zealand?
The Report is of interest to us because:
- if Open Banking is implemented in Australia, it sets out the likely scope of Open Banking, what the regulatory framework would look like, what safeguards may be in place, and the technological mechanisms by which it should be achieved in Australia; and
- if Open Banking is implemented in New Zealand, our regulators are likely to look closely at how it has been adopted in Australia (particularly given that our 4 largest banks all have Australian parents).
If you would like to know more, please contact a member of our team.