How the open banking API could transform financial services to benefit consumers

Until recently, the idea of waiting a day or two for a bank transfer to reach your account was normal, however consumers are starting to demand immediate and seamless payment alternatives. With upcoming developments in the Australian financial services sector, we should start to see these demands met – if not by banks, then by FinTech firms aiming to transform the financial services industry.

Twelve months after the government announced the introduction of a Consumer Data Right (CDR) in Australia, Data61 has released a working draft of the standards that will underpin it.

The CDR will offer Australians control over the data held about them by service providers, and the right to share it with a third party provider – including competitors to the service that compiled it. The CDR will first be implemented in the financial services sector under the Open Banking framework from July 2019.

ACCC Chairman Rod Sims expects the framework to: “…encourage competition between service providers, leading not only to better prices for customers but also more innovation of products and services.”

We’re already seeing new services emerge in this space, such as the ability to pay at checkouts via your mobile phone, but real disruption will take time to occur as FinTech firms are provided with access to consumer data to create products we haven’t yet heard of.

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