Open data lets fin­techs com­pete


The fin­tech com­mu­nity has wel­comed the Turn­bull gov­ern­ment’s com­mit­ment to im­ple­ment an open bank­ing regime, say­ing it will en­able lo­cal com­pa­nies to com­pete more vig­or­ously against the global “dig­i­tal jug­ger­nauts”.

Fin­Tech Aus­tralia chair Stu­art Stoyan said news that the gov­ern­ment would leg­is­late to en­able cus­tomers to ac­cess their own bank­ing data would be key to pro­vid­ing cus­tomers with greater choice, an im­proved un­der­stand­ing of their fi­nan­cial po­si­tion and more con­trol over their fi­nan­cial fu­ture.

“It is also vi­tal to sup­port­ing greater fin­tech in­no­va­tion, which cre­ates in­creased com­pe­ti­tion, greater choice, more ef­fi­cient de­liv­ery and a lower price for fi­nan­cial ser­vices for con­sumers,” Mr Stoyan, also the founder of the mar­ket­place lender MoneyPlace, said.

“Without ac­cess to the fi­nan­cial data nec­es­sary to build, test and de­ploy in­no­va­tive so­lu­tions in their lo­cal mar­ket, Aus­tralian com­pa­nies stand lit­tle chance of be­ing able to com­pete on an in­creas­ingly global stage against dig­i­tal jug­ger­nauts.

“The net out­come of this is that in­creas­ing amounts of our tax rev­enue and best-skilled labour will go off­shore.” Scott Mor­ri­son yes­ter­day re­leased a re­port by King & Wood Mallesons part­ner Scott Far­rell that will guide the gov­ern­ment’s ap­proach to im­ple­men­ta­tion of an open bank­ing sys­tem.

It will be in­tro­duced as part of the con­sumer data right — a more gen­eral right to data be­ing cre­ated across the econ­omy fol­low­ing a rec­om­men­da­tion by the Pro­duc­tiv­ity Com­mis­sion’s data avail­abil­ity and use in­quiry.

Last Novem­ber, the gov­ern­ment said the con­sumer data right would be es­tab­lished sec­tor-by­sec­tor, be­gin­ning with bank­ing, en­ergy and telecom­mu­ni­ca­tions.

The Far­rell re­port makes 50 rec­om­men­da­tions on the reg­u­la­tory frame­work to sup­port open bank­ing, in­clud­ing what data should be shared and with whom; the safe­guards needed to en­cour­age open bank­ing; how data should be trans­ferred; and how open bank­ing should be rolled out.

The Trea­surer said in an ad­dress to the Citibank A50 econ- omic fo­rum in Syd­ney yes­ter­day that open bank­ing would com­pletely trans­form the way con­sumers in­ter­acted with the bank­ing sys­tem.

By grant­ing third-party ac­cess to their data, they would be of­fered more com­pet­i­tive deals by ri­val providers, en­hanced ser­vices and prod­ucts tai­lored to their needs.

“Banks won’t be able to af­ford to take cus­tomers for granted and lock other com­peti­tors out,” Mr Mor­ri­son said.

“In­no­vate or watch your cus­tomer walk out the door, armed with their data.

“The dis­rup­tion to the ma­jor­bank strong­hold on data will make the process of switch­ing between banks less pain­ful and help them over­come the ‘has­sle fac­tor’ that sees cus­tomers stay with their cur­rent bank even there are bet­ter deals on of­fer.

“Im­por­tantly, open bank­ing will lift the lid on com­pe­ti­tion and en­cour­age a new wave of fin­tech in­no­va­tion and prod­uct de­vel­op­ment.”

Mr Mor­ri­son fore­shad­owed a fu­ture where mo­bile apps would en­able cus­tomers to not only man­age their fi­nances, but get re­al­time bud­get and in­vest­ment ad­vice from ex­perts over live chat.

There would also be real-time prod­uct com­par­i­son ser­vices.

The Far­rell re­port said data en­hanced by anal­y­sis should not be in­cluded in open bank­ing.

Stu­art Stoyan

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