Australia’s banks will be forced to share the data they hold on a customer when requested by that customer under a new regime introduced by the federal government.
The 2017-18 budget reveals an “open banking” scheme intended to give customers greater access to and control over their banking data.
It will “empower them to seek out better and cheaper services” Treasurer Scott Morrison said in his budget speech.
“This will be a major change in the way Australians use and benefit from their data, and open the way for better services, more choice of providers and lower prices.”
It follows recommendations made by the lower house’s economics committee last November that banks be forced to give up customer transaction histories to individuals upon request.
The Productivity Commission had also suggested banks build APIs to facilitate data sharing with customers.
The government's new scheme mimics the UK model where that country's banks have been told to allow for API-based sharing of data for individual and small business customers by next year.
The Treasury department has been given $1.2 million to undertake an independent review into out how the Australian scheme should look. It will also consider privacy and consumer protections.
The report will be delivered before the end of the year.
The government is also seeking to make it easier for banks to test new technologies by legislating to bring more businesses into the regulatory sandbox established by ASIC last December.
The open banking regime is part of a package of reforms aimed at the banking sector in this year’s federal budget.
The changes include a new complaints authority dubbed the Australian Financial Complaints Authority; a ‘banking executive accountability regime’ requiring banks to notify the Australian Prudential Regulation Authority (APRA) of new senior appointments and for executives to register with the agency; and a six-basis point levy on the big banks’ liabilities.
The federal government has kept the pressure on the big banks through a parliamentary inquiry after several separate scandals emerged involving the mistreatment of customers last year.