ACCC delays banking data access reforms

Reforms allowing customers control of their bank data have been put back to ensure against security and privacy breaches.

Banks have been concerned about the timeline for the banking reforms. Picture: AAP

The competition regulator has delayed the start of key open banking reforms, which allow customers to have control of their data, by five months to July 2020.

The Australian Competition and Consumer Commission said it has postponed the start date from February, citing in a statement “new additional implementation work and testing” of systems related to the Consumer Data Right (CDR).

Consumers will be able to direct major banks to share their credit and debit card, deposit account and transaction account data with approved providers from July rather than February. Consumers’ mortgage and personal loan data will be able to be shared after November.

The ACCC said it had formed the view the updated timeline would “ensure necessary security and privacy protections operate effectively”.

“The 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,” ACCC Commissioner Sarah Court said.

“Robust privacy protection and information security are core features of the CDR and establishing appropriate regulatory settings and IT infrastructure cannot be rushed.”

National Australia Bank chairman Phil Chronican last month warned that the ACCC’s deadline was tight as it was still building a registry and testing systems.

“We are working with the ACCC-led team to ensure that the registry is built and tested so that whatever is released in February is secure and doesn’t expose customers to data breaches or fraud,” he said.

“The timetable at this stage is looking tight from the point of the industry-wide work.”

ANZ Bank chief executive Shayne Elliott has said he views the open banking change as an opportunity to win market share.

“We will be ready to comply with the requirements on the timetable that’s set out at present,” he said. “We see it as an opportunity for ANZ, and it will increase competition.”

Treasurer Josh Frydenberg in December last year released a revised open banking timeframe, which was the first extension to the initial regime.

The open banking reforms were due to provide consumers access to their data for deposit and transaction accounts and credit cards at big banks from February.

Mortgages and personal loans were captured under the prior regime from July, while smaller banks have a slower implementation timeline.

Legislation clearing the way for open banking was passed in August, making it easier for consumers to switch providers and forces banks to share an individual’s data when permission is granted.

The ACCC said it would make CDR rules in January that reflected the new timetable, and conduct further consultation regarding any changes to other phases of the CDR.

Banking will be the first sector where the CDR applies and the regime will be subsequently be rolled out across other industries, including energy and telecommunications.

Data portability is being put in place by the ACCC to increase competition and it allows businesses to make more tailored offerings to consumers.

The ACCC said it had been working closely for several months with the big four banks and the nine entities selected to be the initial data recipients to test and refine the CDR ecosystem.

FinTech Australia general manager Rebecca Schot-Guppy said the group was disappointed by the postponement, suggesting more fintech businesses be allowed to test the CDR ahead of July.

“This isn’t the news we wanted to hear right before Christmas. However, it’s unsurprising given some of our members expressed doubts that the major banks would have their data formatted and ready in time for the policy launch in February 2020,” she said.

Credit reporting group Experian supported the ACCC’s delay.

“Based on our experience in the UK, we have always believed the implementation of CDR here needed to be exercised with care, so we welcome this considered approach to the CDR rollout,” said Poli Konstantinidis, Experian ANZ’s executive manager of credit services and decision analytics.

“Greater data sharing will see the ownership of customer data put back in the hands of Australians and give them the power to access better deals, so while a true open data environment may be delayed for now, it’s vital CDR is implemented effectively and regulated properly.”