The vast majority of Data Action’s clients are accessing its Product Reference Data (PRD) solution to meet the stringent compliance obligations of Open Banking.
Open Banking is one of the biggest shake-ups in banking in Australia and rolls out across the country’s banking sector over the next 18 months, beginning today for consumer data sharing obligations for the big four banks.
Developed by the Australian Competition and Consumer Commission, it is part of Australia’s Consumer Data Right (CDR) which aims to provide greater choice and control for Australians over how their data is used and disclosed. Banking is the first sector to which the CDR applies followed by the energy and communications sectors.
Open Banking allows consumers to tell their bank to share their data with other banks, fintechs and technology services providers which means it will improve a consumer’s ability to compare and switch between products and services. It will also encourage increased competition between service providers, leading to better outcomes for customers.
The big four banks went live with product reference data on 1 July last year and go live today with the initial Phase 1 of consumer sharing data. The rest of the industry can opt to go live from today for Product Reference Data up until the mandated date of October 1 2020. They are required to go live with consumer data from July 1 next year.
Specialist software and services provider to the financial services industry Data Action’s PRD solution provides product APIs, detailing eligibility criteria, terms and conditions, price as well as availability or performance of a product. The product APIs share information that are typically found in Product Disclosure Statements and are integrated with Data Action’s Core Banking Systems.
Data Action is leveraging cloud technology offered by Amazon Web Services to deliver a leading solution to clients and future-proofed for increased uptake within the Open Banking ecosystem.
Data Action Chief Executive Officer Nicola Burgess said some DA clients will be compliant and going live in early July, well ahead of the October 1 deadline.
“The difference between our PRD solution and other providers is that it is fully automated whereas others are using a manual upload system which is more intensive.”
Ms Burgess said the banking industry had embraced Open Banking as it requires banks to be nimble and continue to innovate to keep their customers.
“For consumers it is easier for them to sign up for a loan or credit card with their current bank because it has all the relevant transaction history and identification in its system.
“With Open Banking, a consumer can direct its bank to send relevant information to any bank or lender making signing up for a new product easier.”
Ms Burgess said the financial services industry is going through rapid change. “We have fintechs, neo/digital banks and mutuals competing for customers from the big four banks.
“Open Banking will open up the competition further with new entrants and some may not be typically associated with financial services in the future.”
Ms Burgess said Open Banking had been operating in the UK for two years and after a slow start consumer adoption has ramped up considerably in the past nine months with over 400 million successful API/interfaces accessed successfully between banks and third-party providers.
DA’s banking clients have more than one million customers representing more than $33 billion in client assets. DA is a national business, employing staff in Adelaide, Brisbane, Melbourne and Sydney.
Its clients include 86 400, Bank Australia, Greater Bank, Beyond Bank and People’s Choice Credit Union.