The implementation of Australia’s Consumer Data Right – the data portability scheme which will enable Open Banking – has been delayed until July 2020, giving banks an additional four months to prepare.
The ACCC, which had been planning to begin the scheme in February following the current testing phase, announced the setback today, saying more time is needed to test both the data sharing processes and protections for security and privacy.
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July 1st 2020 is the new deadline for major banks to share consumer data relating to credit and debit cards, deposit accounts and transaction accounts. Data sharing on mortgages and personal loans will be required on November 1st.
But the timetable for sharing product reference data remains unchanged: February 1st 2020 for major banks and 1st July 2020 for non-major banks.
What is Open Banking?
Under Open Banking, banks are required to share consumers’ financial data with accredited service providers, including other banks and third parties, when requested to do so by the consumer.
It is hoped the newly portable data will reduce barriers to switching, improve competition, and drive innovation in the banking sector.
Open Banking is the first test of Australia’s Consumer Data Right, a legislated scheme which allows consumers to access some the data companies hold on them. Following the banking sector, the Consumer Data Right is expected to be applied to energy and telecommunication.
Open Banking was already behind schedule, and the regulator revealed in October that the latest round of testing for banking, involving Australia’s big four and a select group of financial institutions, had missed several milestones.
“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 in a statement today.
“Robust privacy protection and information security are core features of the CDR and establishing appropriate regulatory settings and IT infrastructure cannot be rushed.”
The ACCC today said it will make new CDR rules in January to reflect the new timeline. But the regulator is still considering a timeline for the non-major banks.
The following is the new timeline released by the ACCC today:
- major banks will be required to share consumer data relating to credit and debit cards, deposit accounts and transaction accounts from 1 July 2020
- major banks will be required to share consumer data relating to mortgage and personal loan accounts from 1 November 2020.
Obligations to share product reference data will remain unchanged:
- major banks will be required to share PRD for credit and debit cards, deposit accounts, transaction accounts, mortgage and personal loan accounts from 1 February 2020
- non-major banks will be required to share PRD for credit and debit cards, deposit accounts and transaction accounts from 1 July 2020.