Fintechs urge govt to ignore open banking distractions

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Fintechs urge govt to ignore open banking distractions

Disregard finance industry wishlist.

FinTech Australia is calling on the government to stand up to banks when it comes to the planned introduction of open banking.

Fintech companies, which stand to benefit from customers having greater control over their data and greater mobility within the finance sector, want the government to reject overtures made by banks through the Australian Banking Association (ABA).

The ABA nominally supports open banking but wants the implementation of certain parts of the regime to be delayed, including the start date and its application to lending products.

Peter Lalor, CEO of fintech company MoneyBrilliant, said in a statement that banks are trying to delay the introduction of open banking and exclude loan products from its scope "simply because these are the most lucrative areas of their business and because switching is easiest in credit cards and mortgages."

FinTech Australia’s open banking policy working group, which claims to represent 220 fintechs, argued the government needs to hold firm against the banking sector.

It said the first stages of open banking should assist customers with negotiating better deals on loans, as well as help overcome responsible lending issues highlighted by the banking Royal Commission.

The group said the first steps should include:

  • Both deposit and lending products
  • A 12-month implementation timeframe
  • Personalised product information including interest rates and fees and charges applicable to each account
  • Small-to-medium sized business and joint accounts
  • A formal role for the Australian Competition and Consumer Commission

Lalor said Australia could look to the UK experience when considering how to speed up the implementation of an open banking regime.

Many banks have begun preparations for the introduction of open banking, with ANZ predicting enabling legislation will be in place by June, and some level of customer information being shared within 18 months.

Macquarie Bank and NAB have both designed APIs to facilitate open data sharing.

ANZ Bank has also recently partnered with Data Republic to stand up infrastructure for open data exchange.

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