Significant Changes To Banks Pushed Back By ACCC
It’s the biggest change to the financial services industry since the damning royal commission, designed to give power from the banks back to customers.
But the introduction of Open banking, intended to be available in February, has now been pushed back by the ACCC to allocate more time to test privacy and security protections.
‘The Consumer Data Right (CDR) is a complex but fundamental competition and consumer reform and we are committed to delivering it only after we are confident the system is resilient, user friendly and properly tested,” Sarah Court, ACCC commissioner, said in a statement.
‘Robust privacy protection and information security are core features of the CDR and establishing appropriate regulatory settings and IT infrastructure cannot be rushed.’
The new banking system gives customers of the big four banks – Commonwealth, Westpac, ANZ and NAB – ownership of their transaction data and enables them to switch providers. Customers of other banks will also eventually have access to Open banking.
It means the banks will have to make transaction, deposit and credit card data available if requested by a customer by July. Mortgage data must also be added from November.
Customers can then choose to share all their transaction data with third parties, who could analyse that information to offer better deals and incentives to switch banks.
A competition law specialist, Professor Deborah Healey from UNSW Law, said the new system will ‘devastate’ the banking industry.
‘This is potentially earth shattering for the financial services industry,’ Professor Healey told ABC News.
‘Because these are very important decisions people are making, and I think they will put time and effort into making those changes if, in fact, they see that something better is on offer.’
‘Even the threat of switching is very important in terms of having an efficient competitive market.’