The Government has released for public consultation the second stage of exposure draft legislation to implement the Consumer Data Right in line with the recommendations of the Review into Open Banking in Australia, and the Designation Instrument for the application of the Consumer Data Right to the banking sector (Open Banking). Background.
UPDATE 11 December 2018: Parliament has adjourned until 12 February 2019 without the Bill being introduced. It is not clear whether the Bill will be introduced and passed before an election. New draft Bill and timetable.
The revised definitions and Privacy Safeguards sections of the exposure draft reflect feedback from public consultation on the first draft legislation.
The Government will phase in Open Banking with all major banks making data available on credit and debit card, deposit and transaction accounts by 1 July 2019 and mortgages by 1 February 2020. Data on all products recommended by the Review will be available by 1 July 2020.
All remaining banks and ADIs will be required to implement Open Banking with a 12-month delay on timelines compared to the major banks.
APRA expresses concerns
In a recent speech, APRA Chair Wayne Byres said:
The financial sector, particularly in banking, also faces increased demands to make data available to external parties. The Consumer Data Right and Comprehensive Credit Reporting will require banks to make data available to customers and competitors. This would be threatening enough if the data was readily available to banks, as a source of competitive advantage will be lost. But that assumes the data is already accessible and being actively used. In reality, the complexity of systems and process environments and reliance on manual processes has made the mapping of data lineages, managing data quality and the aggregation of data difficult. Larger ADIs have begun to tackle this through the appointment of Chief Data Officers and the development of enterprise data management frameworks. A ‘fit for the future’ bank, however, would have long ago built the systems and have high quality data readily to hand for its own purposes. As things stand, significant investment will be needed to meet the new obligations.