What is Open Banking and what does it mean for you?
Open Banking is a new system that makes it easier for consumers to share their banking and financial data with organisations accredited by the Australian Competition and Consumer Commission.
What is Open Banking?
In August 2019, the Australian Government passed Consumer Data Rights (CDR) legislation, giving consumers and small businesses new rights over their personal data.
CDR paved the way for Open Banking, which allows consumers to share their financial data with accredited organisations. This will make it easier to compare products and services, and switch between different financial institutions.
Data you will be able to share under Open Banking
Under Open Banking you will have control over who can access your financial data. Some of the data you may choose to share includes:
- Personal information such as your phone number, email and address
- Details of your account balances
- Information about your financial products such as the interest rate and fees
- Transaction details including amounts spent.
The benefits of Open Banking
Opening banking is still in its infancy. As the system matures, it is expected to provide a number of benefits including:
- Being able to sign up more easily for new credit or debit cards
- Making it easier to secure a loan
- Accessing budgeting tools that let you track and plan your spending
- Being able to switch more easily from one financial institution to another.
Open Banking is being introduced gradually
Open Banking is starting small, and will steadily build over time. On 1 July 2020, Australia’s four big banks initiated Open Banking, allowing their customers to share details of their credit cards, deposit and transaction accounts. From 1 November 2020, consumers will be able to share their data relating to home loans, investment loans, personal loans and joint accounts. Over the next 12 months, other authorised deposit-taking institutions will start to take part in Open Banking.
As Consumer Data Right grows over time, more providers are expected to become accredited including organisations in the energy sector. This will allow consumers to transfer data from their existing energy provider to a different provider or product comparison website to receive an accurate quote on services .
How secure is Open Banking?
Under Open Banking your personal data remains very secure. The financial institutions and other accredited organisations involved in Open Banking need to follow strict security standards at all times.
Open Banking and Community First members
We will keep our members updated in regards to Open Banking, and Geelong Bank’s participation in the system. Rest assured though, the decision to take part in Open Banking rests with you. It will always be your data, and your choice. At Geelong Bank, we expect to complete our first phase of readiness in October 2020. This will relate to the availability and sharing of product data only.
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