Non-major banks join open banking regime

Treasury has announced that 16 data holders and 16 additional brands have become live and will be sharing data as part of the Consumer Data Right (CDR) and open banking regime (which officially launched in July 2020).

This has followed the launch of the new phase of the open banking regime, with 1 July 2021 marking the deadline for non-major banks to provide accounts and transactions data on phase 1 products.

Phase 1 products include savings accounts, call accounts, term deposits, current accounts, cheque accounts, debit card accounts, transaction accounts, personal basic accounts, GST and tax accounts, and credit and charge cards.

The additional entrants under the new phase of the regime have joined “longstanding active data holders”, including ANZ, the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and Regional Australia Bank, as well as recently activated AMP, Bendigo and Adelaide Bank, and Tyro.

Several entrants have recently become active data holders (which means that they can currently hold consumer data) including software-as-a-service provider Adatree, Australian Military Bank, Citigroup, Frollo Australia, Heritage Bank, HSBC Bank Australia, financial software company Intuit, Judo Bank, Macquarie Bank, Suncorp and Volt Bank.

Several other providers are accredited data recipients (ADR), meaning that they may receive consumer data via CDR after undertaking a rigorous consent process, and they must meet various legal requirements, including the requirement to only collect and use data that they require to provide a product or service.

ADRs include application programming interface (API) platform Basiq, Credit Simple, Ezidox, Finder (the first comparison site to be accredited under CDR), illion Open Data Solutions, Acsiss by Siss Data Services (which provides banks and fintechs with access to consumer data via open banking), and Yodlee.

The Australian Consumer and Competition Commission (ACCC) is working to ensure that any remaining non-major ADIs meet their data-sharing requirements, Treasury said.

The launch of the new phase of the open banking regime has followed the official launch in July 2020, when it was only open to major bank customers.

In November 2020, customers of the four major banks could begin sharing their home loan and mortgage offset data to ADRs under phase 2 of the CDR.

From 1 February 2021, major banks were required to provide account and transaction data on phase 3 products (which include business finance, investment loans, lines of credit, overdrafts, asset finance, cash management accounts, farm management accounts, pensioner deeming accounts, retirement savings accounts, trust accounts, foreign currency accounts and consumer leases.

From 1 November 2021, non-major banks will be required to provide account and transaction data on phase 2 products (home loan, personal loan and mortgage offset accounts), while on 1 February 2022, non-major banks will be required to provide phase 3 products data.

The CDR regime was recently officially handed over from the ACCC to the Treasury, with senator Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, taking over as CDR rule maker.

Commenting on the commencement of the latest phase of the regime, Senator Hume welcomed the new entrants and said: “The CDR is a transformative approach to data that places the consumer at the centre of the system. The system is built from the ground up with incredible security and with the user in control of their data.

“Through the CDR, Australians can leverage their data to effortlessly access better, more specific products, potentially saving thousands.”

CDR rules amendments open for consultation

Additionally, Treasury has published exposure draft amendments to the CDR rules (version three) for formal consultation.

These changes are designed to reduce barriers to participation in the CDR and allow consumers to better leverage their data in common banking scenarios, Treasury said.

It would do this by:

• Allowing consumers to share their data with trusted advisers;
• Introducing a sponsored tier of accreditation and a CDR representative model;
• Allowing participants to share CDR insights with consumer consent for specific purposes; and
• Creating a single consent data sharing model for joint accounts.

The current rules do not allow the disclosure of CDR data by an ADR such as a bank to other parties that the consumer may wish to share their CDR data with (such as mortgage brokers).

The ACCC launched an informal consultation in 2020 into proposed changes to the CDR, which would enable “trusted advisers” such as mortgage brokers to receive CDR data in certain circumstances.

The responses to this were used to inform a draft set of CDR rules that would enable CDR data to be shared with specific trusted advisers.

Treasury is seeking submissions on the draft rules until 30 July 2021. Explanatory materials, and a mark-up version of draft rules are available on the Treasury website.

[Related: CDR rules updated to expand remit]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.