Government launches open banking inquiry

The government passed the Consumer Data Right (CDR) Bill in August, with senator Jane Hume then saying it would improve competition and efficiency across industries.

Banking is set to be the first sector to share information under the government’s recently introduced consumer data right legislation, otherwise referred to as open banking.

Customer data sharing was meant to start across the major banks in February, but that launch has been delayed to July.

Treasury stated the new inquiry will examine among other matters, how the CDR can be “expanded beyond its current ‘read’ access to include ‘write’ access to enable customers to apply for and manage products (including, for open banking, by initiating payments)”.

It will also consider how the regime can be leveraged with other frameworks such as the New Payments Platform as well as how the CDR can be used to overcome behavioral and regulatory barriers for consumers to switch between products and providers.

The inquiry will also compare the scheme to overseas counterparts.

The review is being led by King & Wood Mallesons partner Scott Farrell, who undertook the formative review which gave rise to the CDR regime.

It will consult with industry, consumer and privacy advocated and other interested parties in developing a report and recommendations.

The review is due to report in September and an issues paper will be made available earlier in the year for interested parties to provide input and feedback.

Despite the opened inquiry, Treasury insisted the CDR will provide consumers with greater access to their personal information, giving them the power to instruct businesses to provide safe and secure access of their data to trusted third parties, to more easily compare offers in the market and to switch providers.

The CDR is also said to allow new competitors to enter the market and challenge existing providers.