Open access to better deals from 2020

MONDAY, AUGUST 5, 2019 themercury.com.au SUBSCRIPTIONS 1300 696 397 BANKING customers will soon be able to share their personal transaction information to score themselves a better deal.

No products are off limits – consumers can save money on anything from credit cards and home loans to transaction and savings accounts.

Dubbed open banking, it is legislated to begin in February 2020. But few Australians have actually heard about it.

New research from financial research firm DBM Consultants has found 85 per cent of us do not know about open banking.

The Australian Banking Anna Bligh says it will be easier to get a better deal. Association’s chief executive officer, Anna Bligh, said in simple terms it “grants customers the legal right to access all of their own data that’s held by a bank”.

It will be voluntary for customers to allow this to happen. “Just as importantly, it will legally require banks to transfer data at a customer’s request to another bank,” Ms Bligh said.

“What that means for customers is shopping around for another deal will be faster and simpler than ever.”

Open banking’s key objective is to deliver customers more competitive deals by making it easier to switch between products and providers.

It also makes it simpler for a financial institution to determine if a customer is worth taking on.

Ms Bligh said it was currently “almost impossible” for customers to share their own data between banks.

The boom in tap-and-go transactions has increased data. Ms Bligh said customers could ask their bank for a printout of transaction records but “you would be carrying a briefcase full of documents around to every bank”.

Ms Bligh said, with open banking, customers could share their data with a financial institution from home.

The four major banks are due to start open banking in February. All other providers have another 12 months to join.

Consumer group Choice’s chief executive officer, Alan Kirkland, said open banking would help “customers navigate confusing banking products”.

“Having access to your own personalised usage data will make it easier to compare products and see which one is the best value for you,” he said.

There are privacy protections built into open banking and the Australian Competition and Consumer Commission could take action if necessary.

Banks are the first cab of the rank, and then this type of data sharing is likely to extend to electricity providers and telcos.

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