Timing couldn’t be better for Open Banking

By Kristofer Rogers, CEO of Split Payments.

At the recent AFR banking and wealth conference, held as a virtual event during these unprecedented times, ACCC chairman Rod Sims reasserted a commitment to keeping the July 1 deadline for the launch of the first iteration of the Consumer Data Right reforms targeting the banking sector.

Called Open Banking, this reform requires banks – starting with the big four – to make transactional data available to accredited third-party data recipients, essentially empowering consumers to control who can access their data and how they can use it.

A common theme of the ACCC chairman’s speech – as you would expect – was competition. He even evoked the ‘invisible hand’ made famous by Adam Smith’s Theory of Moral Sentiments way back in 1776, where competition is held to be essential to the survival of a market economy.

In order to drive competition, it is vital to stay the course. Indeed, the impact of Open Banking, and the wider Consumer Data Right has the potential to be one of the most significant reforms in recent history.

In fact, Rod Sims likened it to the ‘reform decade’ of the 1980s in the Hawke-Keating era.

So why is the Consumer Data Right so important? This reform is not just about competition. It is about trust, transparency, and ultimately equity.

These are all social outcomes and are just as important to today’s consumers as getting a good financial outcome. It is the quintessential Australian ideology of a ‘fair go’.

In its simplest form, Open Banking is about putting control squarely back in to the hands of the consumer and empowering them to use emerging FinTech tools to get better deals, gain deeper insights, and discover smarter ways to spend or save.

And why is the timing never better? The current pandemic and challenging economic landscape ahead will inevitably deliver a hard-learned upside by necessarily improving people’s financial literacy.

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Source: Timing couldn’t be better for Open Banking – InnovationAus