Banks cite pri­vacy in cau­tion over open data re­view

Townsville Bulletin - - NEWS - STUART CONDIE

AUS­TRALIA’S banks have cau­tiously wel­comed the for­mal­i­sa­tion of a re­view to ex­am­ine how to im­ple­ment an open bank­ing regime that could dra­mat­i­cally in­crease com­pe­ti­tion and re­duce costs for cus­tomers.

Trea­surer Scott Morrison has ap­pointed Scott Farrell, a part­ner at law firm King & Wood Mallesons, to lead a re­view that will re­port to gov­ern­ment by the end of the year.

Big banks have gen­er­ally ac­cepted the new regime, an­nounced in May and set to come into force in 2018, will bring ben­e­fits for cus­tomers but many have ex­pressed reser­va­tions about se­cu­rity.

Aus­tralian Bankers’ As­so­ci­a­tion pol­icy di­rec­tor Tony Pear­son yes­ter­day re­peated those con­cerns. “We be­lieve that, de­signed prop­erly, ex­pand­ing data ac­cess will give cus­tomers valu­able in­for­ma­tion to find bet­ter deals with their fi­nan­cial prod­ucts and ser­vices,” Mr Pear­son said in a state­ment.

“But it will take a shared ef­fort be­tween banks, gov­ern­ments and fin­techs to ad­dress is­sues like en­sur­ing cus­tomer pri­vacy is pro­tected, their data is se­cure and know­ing what to do when some­thing goes wrong.”

Open data means cus­tomers will be able to re­quest in­depth in­for­ma­tion about their fi­nan­cial his­to­ries and use it to find prod­ucts and ser­vices.

This could see fin­techs and au­to­mated ser­vices tak­ing mar­ket share away from tra­di­tional lenders.

The chief ex­ec­u­tives of the big four banks told MPs this year they wel­comed com­pe­ti­tion but their call for se­cu­rity was echoed by Mr Pear­son yes­ter­day.

“Banks wel­come the move to an open bank­ing regime pro­vided that cus­tomer se­cu­rity and pri­vacy needs are para­mount,” he said. “This in­quiry is a cru­cial step to iden­tify and re­solve the le­gal and tech­ni­cal chal­lenges in open bank­ing.”

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