The regulatory structure for Open Banking in Australia was discussed in our Report “Open Banking Goes Worldwide: U.S. Inroads are Keeping Pace with Global Efforts,” but the Australian Treasury has now amended the Consumer Data Right (CDR) rules so that those currently accredited by the Australian Competition & Consumer Commission (ACCC) can sponsor third parties to become accredited or enable them to operate as a representative. This rule, passed in October, quickly expanded the number of participants in Open Banking.
“Australian open banking provider Frollo’s yearly industry report, shows as data availability has accelerated, optimism for the future of open banking is rising.
According to the survey of 131 financial institutions, 70 banks started sharing consumer data and 14 businesses became Accredited Data Recipients in the first 10 months of 2021.
This is an increase from just fived data Holders and five data recipients in 2020.
In October, Treasury announced amendments to its Consumer Data Right (CDR) rules that allowed increased participation in open banking.
These new amendments allow for current CDR participants, accredited by the ACCC, to sponsor other parties to become accredited or allow them to operate as a representative, cutting much of the red tape that surrounded open banking legislation in Australia.
Chief Operating Officer of Australian Finance Group, John Sanger, said eased open banking restrictions could be a game changer.
‘We view Open Banking as a transformational enabler for future customer experiences and products that may change the way consumers borrow, save and manage their finances,’ Mr Sanger said.
New data from Frollo shows the most popular uses for open banking:
• Lending: Income & Expense verification (highly valued by 59% of respondents).
• Money management: Multibank aggregation (50%) and Personal Finance Management (50%)
• Verification: Customer onboarding (49%), Identity verification (38%), account verification (34%) and balance checks (30%)”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group