Open banking awareness campaign launches

A new campaign ‘Commit to Open Banking’ has been launched by Basiq to encourage more businesses to move to adopt open banking, given slow take-up and amid increasingly cyber attacks.

The campaign highlighted that just 88 businesses have so far signed up to open banking but given that recent cyber attacks and online fradulent activity have made lenders less open to third-party ‘web connectors’ (as they tighten up security and move to the government-backed open banking system), many more will need to come online in order to make the regime mainstream.

Founder and chief executive of Basiq, Damir Cuca, has said that more businesses need to adopt the regime suggesting that those not already taking steps towards open banking are “playing with fire” and need to consider how they will future-proof themselves against disruptions to data connectivity. 

“How would it impact your business if it was unable to connect to just one of the major banks? For many this would be seriously problematic. We are already aware of three major banks actively implementing measures preventing access to web-connected data,” Mr Cuca said while launching the campaign. 

He added that banks in particular were offering becoming less likely to find fixes for any issues in third-party connectors as they focus on open banking, stating: “It is no longer efficient to continue band-aid fixing a degrading system when there is a better alternative for accessing banking data already available; for both businesses and consumers. 

“We know banking web connectors are on their way out. This view was supported in the final paper from the Statutory Review of the CDR that recommended banning web connectors in the near future where the CDR is a viable alternative.

“We want to make sure businesses are ready for when that time comes, especially taking into consideration the time it takes to become CDR accredited. 

“It’s time to stop referring to open banking as a future state, because it is already here. The ecosystem is rapidly expanding and we can no longer rely on web connectors alone to access banking data.

“I hope this campaign will encourage others to commit to the future of data access in Australia and make the move. Not only to ensure the continuation of many Australian fintechs relying on banking data, but also to protect consumers and ensure they have choice and receive value from the data they create. 

“Ultimately, open banking provides a more consistent and secure experience that will only continue to improve with time.”

CDR expands

The campaign launch comes as the Consumer Data Right regime opens up into other sectors (for example, the energy sector, which commenced last month) and as open banking expands into other segments.

New legislation was recently introduced into Parliament that expands the Consumer Data Right to enable consumers to instruct lenders to initiate actions, including moving bank products on their behalf and the ecosystem is being widened to also bring non-bank lenders under its remit.

The draft designation instrument proposes non-banks that provide a minimum of $50 million of annual financing to be covered.

[Related: Mortgage competition enhanced with non-bank CDR inclusion]