Banks and fintechs want robust data-sharing standards
Both big banks and fintech start-ups want robust governance standards created to ensure customers can move data from one financial services provider to another without exposing the sector to cyber attacks.
Banks are preparing for new legislation that will give their customers the right to request transaction data be given to a potential competitor under a new data access regime the Productivity Commission said this week could “reinvigorate competition policy”.
The Productivity Commission’s final report on data use and availability, published on Monday, set out aggressive timelines for the creation of a “comprehensive right” in a new law designed to empower individuals and businesses throughout the economy to make better use of the data held by corporations and governments.
“Data is a strategic asset with great potential and should be treated and managed as such,” the commission said.
The government was expected to respond to the report in Tuesday night’s federal budget, after Treasurer Scott Morrison told The Australian Financial Review on Monday that giving consumers greater control over their own information could improve competition in the banking system.
The Productivity Commission also called for the government to impose mandatory participation in the “comprehensive credit reporting” regime in 2018 if voluntary participation remains below a “critical mass” of 40 per cent of credit accounts being reported in “public” mode to credit bureaus.
The final Productivity Commission report shifted from its interim report by emphasising that specific sectors develop their own rules and determine to which data the comprehensive right will apply to. It wants sector-specific “accredited release authorities” to oversee the process and consult with industry players.
The commission also said it would be up to each industry to determine what technology facilitates the data sharing. A parliamentary committee reviewing the major banks said this should occur via application programming interfaces (APIs), which would require investment by the banks.
Westpac Banking Corp chief executive Brian Hartzer said creating standards for data security and determining who was liable for data breaches in an era of greater cyber security risk were among the issues that needed to be worked out.
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