Australia's banks could be forced to share data with fintech start-ups

Treasurer Scott Morrison is considering forcing Australia's big banks to share more of their data with financial technology start-ups to bolster the country's comprehensive credit reporting scheme.

The announcement was made as part of the government's new policy vision for growing the fintech sector, launched today.

It revealed it would direct the Productivity Commission to review "options for improving data availability and use", including weighing up calls from the fintech sector to make comprehensive credit reporting mandatory.

The fintech industry's request draws from a perceived reluctance on the part of the big banks to take part in the comprehensive credit reporting scheme, which was introduced in March 2014 to allow the all facets of a consumer's credit history - not just defaults - to be exchanged between lenders.

The government's policy statement posits that better credit data sharing could open up more space for peer-to-peer lending products and marketplaces, and will give lenders a better capacity to tailor products to their customers.

The Productivity Commission review will also consider options for other areas of data sharing, including standardising methods for financial data aggregation and providing government support for open APIs that could facilitate access to critical transactions data for fintech operators.

Speaking from the headquarters of Sydney fintech hub Stone and Chalk, Morrison claimed "the Turnbull government is saying loudly and clearly that we back you".

He said the fintech sector would be critical to creating the "modern, agile economy of the future" and fintech innovations could "lubricate the economy and drive a transition that previously wasn't possible".

"How big is it? How successful will it be? Only time will tell, but we're not going to die wondering," he said.

The government will continue consultation around the potential to extend its crowdfunding framework to debt funding, Morrison said, and to establish a 'regulatory sandbox' that would free fintech start-ups from having to meet certain regulatory demands while still in the testing phase of new products.

The government has also put its support behing the use of blockchain technology in the financial sector but stopped short of any policy provisions to boost adoption.