Famed to be the move that will finally ‘shake up’ the Australian banking industry, open banking’s launch has been pushed back until July 2020, five months later than originally planned.
The Australian Competition and Consumer Commission (ACCC) made the decision to hold back the previously planned February 2020 launch just before Christmas, after deciding there was not enough time for “sufficient testing”.
Over the coming months, the ACCC plans to use the extra time to “get the build of the system right” and to “take steps to have confidence in its secure operation”.
Now set to begin on July 1, the launch of the Consumer Data Right (CDR) in the banking sector will give consumers the ability to direct major banks to share their credit and debit card, deposit account and transaction data with accredited service providers.
The original July 1 deadline for the sharing of consumer data related to mortgages and personal loans has also been pushed back.
The major banks will now be expected to share this information (on customer direction) from after November 1, 2020.
The ACCC believes the updated timeline will allow for appropriate testing to be completed to better ensure necessary security and privacy protections operate effectively.
According to Dentons the updated timetable for the roll out is as follows:
- Major banks will be required to share PRD for credit and debit cards, deposit accounts, transaction accounts, mortgage and personal loan accounts from 1 February 2020 and for non major banks, the deadline is 1 July 2020.
- Major banks will be required to share consumer data relating to credit and debit cards, deposit accounts and transaction accounts from 1 July 2020.
- Major banks will be required to share consumer data relating to mortgage and personal loan accounts from 1 November 2020.
- Major banks will be obliged to share certain more complex data sets including relating to joint accounts, closed accounts, direct debits and scheduled payments from 1 November 2020.
“The CDR is a complex but fundamental competition and consumer reform and we are committed to delivering it only after we are confident the system is resilient, user friendly and properly tested,” ACCC Commissioner Sarah Court said.
“Robust privacy protection and information security are core features of the CDR and establishing appropriate regulatory settings and IT infrastructure cannot be rushed.”
Once fully implemented, CDR or ‘open banking‘ will make it easier for consumers to choose what financial institutions they do business with, through improving the ease at which data can be shared.
Similar to the change mobile phone service providers went through in the early 2000s when portability legislation made it possible to port phone numbers between providers in the future applying for a mortgage could be as simple as filling out a few personal details and consenting to ‘share data’.
After its rollout in the banking sector, the government plans to extend CDR to other industries such as telecommunications and energy.
Words by Kathryn Lee
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