Australia's major banks will be forced to make banking data available to consumers from the start of the 2020 financial year, under a new open banking regime agreed upon by the federal government.
Agreeing to implement the recommendations made by a Review into Open Banking, conducted by law firm King & Wood Mallesons, the government touted the new regime as having the potential to transform the competitive landscape in financial services and the way in which Australians interact with the banking system.
The review on how to boost competition and innovation in the country's financial services sector in February made a total of 50 recommendations on how Open Banking in Australia should look[1], including forcing financial institutions in Australia to participate.
Read more: Australian 'big four' to align their data-sharing ducks ahead of Open Banking [2]
The Commonwealth Bank of Australia (CBA), the National Australia Bank (NAB), the Australia and New Zealand Banking Group (ANZ), and Westpac currently hold around 95 percent market share[3] of the entire Australian finance industry.
In announcing it would be implementing the recommendations from July 1, 2019, the Australian government said the regime will boast strong privacy protections and information security for customers' banking data.
"A key element of these protections is that only trusted and accredited recipients will be permitted to access data, only with customers' express consent and only for the purposes the customer has expressly permitted," Treasurer Scott Morrison said in a statement.
It is expected Open Banking will be phased in with the aim that all major banks will make data available on credit and debit card, deposit, and transaction accounts by July 1, 2019, and