The amendments to the Competition and Consumer Act 2010, Australian Information Commissioner Act 2010 and Privacy Act 1998 create the legislation providing consumers and businesses with a right to access data in relation to them held by businesses. It passed the Senate yesterday, after the bill had lapsed without passage at the dissolution of parliament back in April.
Consumer watchdog ACCC will be responsible for advising what sectors should be added to the system, writing rules, accrediting new participants and enforcement against breaches of customers’ rights.
The bill will be applied across industries, with the banking and finance sector experiencing the scheme, “open banking”,’ first.
The open banking regime officially began at the beginning of the month, with the big four banks being held to a 1 July deadline to make product data available on all credit and debit cards, and deposit and transaction accounts.
Australian Banking Association chief executive Anna Bligh said the passage of the Consumer Data Right would create the legal foundation for open banking, increasing competition in the industry.
“By the end of August, the industry expects the ACCC will issue the ‘lockdown’ version of the rules governing the system,” Ms Bligh said.
“Following the passage of the legislation and the ACCC guidance on the rules, the industry, together with regulators, will begin rigorous testing to ensure the system is safe for Australian bank customers to use.”
Open banking mandates that by February, mortgage data will have to be available, and eventually all products by the major banks will have to share their data in 2020.
Consumer data will be included by 1 February, allowing customers to more fully control their data and compare between banks, enabling greater transparency and competition.
The Consumer Data Right Bill also contains a provision prescribing a review be completed by 1 July 2022.
Open banking has already been implemented overseas. A similar system exists in the UK.
“I would like to thank the active and ongoing engagement by industry, consumer and privacy groups, and fintechs in the development of this bill,” Treasurer Josh Frydenberg said in his address during the second reading of the bill.
“For consumers, improved access to data will support better price comparison services, taking into account their unique circumstances, and promote more convenient switching between products and providers. It will also leverage new technology such as artificial intelligence and allow consumers to make more informed decisions on where they spend their money.”
Ms Bligh commented: “Empowering customers with the ability to use their data to drive a better deal on banking products has the potential to dramatically increase competition and foster innovation across the industry.
“The industry will continue to work with the government in the final stage of the introduction of open banking to deliver a system which both increases competition and ensures data is kept secure.”
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
