The Australian government intending to have an open banking regime in Australia with the aim of transforming the way customers interact with banks and the banking system. The government’s open banking review has come out with a paper that calls on representatives from the banking, consumer advocacy, and fintech sectors, as well as others, to submit proposals on the most appropriate model and the best way to implement such a regime. Called the Review into Open Banking in Australia: Issues Paper, it describes open banking as giving customers greater access to, and control over, their own banking data. The paper draws a distinction between open banking and open data, with the former enabling the customer to direct that they, or elected third parties, be provided with ‘pre-determined parts of their banking data in a secure environment and in a prescribed way, so that it can be used to offer them new or better services’. Such services are described as more competitive banking products and better personal financial management, accounting, tax, and budgeting tools. For those reasons, the government said open banking promises substantial benefits for competition, innovation, and productivity from within the financial services sector in Australia, which is largely dominated by four major banks which combined have significant pricing power and higher than average returns on equity and large market shares.
