Retirement
Your data is about to get more accessible: Here’s how
Open banking is touted as an initiative that will give consumers more ready access to their financial data, and its roll-out in Australia has begun.
Your data is about to get more accessible: Here’s how
Open banking is touted as an initiative that will give consumers more ready access to their financial data, and its roll-out in Australia has begun.
Speaking with Nest Egg, CEO and founder of Moneytree Paul Chapman discusses how open banking is designed to revolutionise the banking experience for everyday Australians.
What is open banking?
Open banking is centred on the principle of giving individuals greater control of the data that authorised deposit-taking institutions (ADIs) already own or have access to.
Under the current system in Australia, it can be difficult to get a hold of the information that companies have on individuals. This means that financial institutions have a great deal of control over the data provided, meaning it is harder to swap providers.
“The easiest way for readers to understand what open banking is: it is to financial data what the world wide web was to the internet,” said Mr Chapman.
“The internet was around for a long time, but when the web came out it was so much easier for anyone to access it,” said Mr Chapman.
The significance of 1 July
The ACCC has previously announced that as of 1 July 2019, a pilot program for open banking will begin. This involves the big four banks sharing product data about their credit and debit cards, deposit accounts and transaction accounts with individual investors.
What does this mean for the banks?
According to Deloitte, information about a customer’s financial position and transactions has been a key source of competitive advantage for the financial institutions.
The move to open banking will result in the ownership of customer information moving from financial institutions to customers, enabling them to share with third parties, meaning banks lose this advantage.
A seismic shift
The changes enabled by open banking and comprehensive credit reporting will have a significant impact in multiple ways. The impact for customers includes data privacy and financial crime, strategy and pricing, conduct and fairness, artificial intelligence and application programming interfaces, Deloitte suggested.
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