Budget 2018: Open Banking a step closer

Australia’s fintech sector will be pleased by the federal government’s budget commitment to spend $44.6 million over four years to establish a Consumer Data Right (CDR).

The CDR is a necessary building block for the progress of Open Banking, and is designed to make it easier for consumers to access their financial records and transfer information between financial institutions.

Consumers will be able to arrange for data on their financial history to be transferred to other financial entities directly rather than having to deal with written records or PDFs, as is now most common.

For example, if a consumer wishes to apply for a personal loan and requires a record of six months transactions from their existing banks, this will be far more easily accomplished through institution-to-institution contact permitted and directed by the consumer.

The Open Banking initiative is seen as potentially providing a significant boost to a growing cadre of neo-banks and fintech startups seeking to tailor new services to consumers.

The three agencies that will be directly involved in the CDR are the Australian Competition and Consumer Commission, the CSIRO and the Office of the Australian Information Commissioner.

The ACCC will determine the sectors that will be subject to the CDR and will develop rules regarding its use and the required data standards. The Information Commissioner will examine the privacy impacts, while the CSIRO will be the data standards setter.

It is unclear how soon the CDR will take effect.