The open banking regime that was set to commence in July 2019 promoting transparency and allowing data sharing for consumers, has been delayed by a further eight months to allow for testing, as was announced shortly before the end of 2018.
The ACCC, Data61 and the big four banks are instead conducting an initial testing program, to assess the security and overall performance of the proposed open banking system.
Consumers and members of the FinTech industry, who will ultimately be the beneficiaries of the consumer data gathered as a result of the regime, will also be invited to take part in the testing program in July 2019.
The testing will involve the sharing of information by banks and financial institutions relating to products and transactions, with a view towards providing access to the public to the comprehensive open banking scheme containing valuable consumer data, by February 2020.
However, such transparency is only likely to be made available once the ACCC is satisfied with the outcomes of the testing program.
The open banking regime is geared towards providing control to consumers over their financial information that is held by banks and financial institutions, and will ultimately allow for data to be shared and accessed when nominated by a consumer, for example, when comparing products, fees and services.
Despite this being a step closer towards a broad Consumer Data Right in Australia, the motivating factor of which appears to be ensuring that there are sufficient protections over consumer data, key personnel in the industry have indicated frustration and disappointment at the delays.
The Consumer Data Right, once enforced, will promote and facilitate secure data sharing between consumers and organisations, and its implementation aims to provide individuals with a direct and accessible remedy against unlawful conduct by organisations.
It is likely that the financial services industry will be the first to undergo the testing. It would be prudent for other industries soon to be affected by the Consumer Data Right, for example, the telecommunications industry, to review internal data collection processes, and consider the effectiveness and security of storage and sharing procedures, in anticipation of being subject to the same scrutiny as the banks.
Dan Pearce, Partner
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