Westpac chief Peter King lambasts open banking as an inefficient use of money

Westpac chief Peter King has taken a swipe at the growth of domestic open banking because few customers use it.

Westpac chief Peter King says just 9000 of the bank’s 14 million customers opt to use the consumer data right. Picture: John Feder

Westpac boss Peter King has taken a swipe at the domestic open banking rollout because few customers use it and he says it doesn’t represent an efficient use of the bank’s resources.

His comments relate to the Consumer Data Right (CDR) – which has started in the banking and energy sectors – and gives consumers more control of their details and information, enabling them to share the data businesses hold if permission is provided.

The regime was touted as a way for consumers to more easily switch providers or update personal details across firms.

But Mr King said that of Westpac’s 14 million customers, just 9000 were opting to use the consumer data right.

“I don’t think that would be classified as an efficient use of money at this point,” he said.

“We should be very cautious about opening up, or expanding, open data to write access or further expanding the capability … there’s a number of options that we have in the economy that are more efficient than CDR, so let’s see what we’ve got.”

Mr King said it would be helpful if government data, such as tax-return information, was added to the regime so that banks could more easily access information when consumers were applying for products.

A Treasury update this week said: “The government anticipates that, as a result, a range of innovative business models will drive the development of new CDR-powered products and services.”

This week, credit reporting and data giant Experian said it aimed to become a fully accredited and active open-banking participant by mid-2023, as it positions for take-up to increase in Australia despite macro economic challenges.

Experian appointed a unit of New York-listed Envestnet as its open data partner in Australia which will facilitate its access to domestic data holders, including the major banks and more than 70 financial institutions.

Experian’s digital general manager Simone Jemmett said while the take-up of open banking had happened slowly in Australia, she expected the transition to accelerate.

Separately, Mr King said artificial intelligence chatbot ChatGPT and its potential uses represented a “step change” in technological capabilities.

Westpac is experimenting with it for tasks like writing customer letters, but Mr King noted the bank needed to work out the safety and security aspects of the shared technology platform.

“There’s a lot of things that will change off the back of it,” he said.

Originally published as Westpac chief Peter King lambasts open banking as an inefficient use of money