Australian watchdog delays introduction of Open Banking

The introduction of Open Banking within Australia has been delayed by a further six months following concerns over testing and data sharing. 

The reservations have led to a new timeline for the implementation of open banking, with financial competition watchdog ACCC revealing that the banking sector’s Consumer Data Right (CDR) act will launch in the opening half of 2020. 

ACCC Commissioner Sarah Court stated: “The CDR is a complex but fundamental competition and consumer reform and we are committed to delivering it only after we are confident the system is resilient, user friendly and properly tested.

“Robust privacy protection and information security are core features of the CDR and establishing appropriate regulatory settings and IT infrastructure cannot be rushed.”

Data security remains integral to regulation within the progress of Australian banking, specifically following the news last year that NPP Australia disclosed “a number” of PayID records and associated data were exposed by a client-side vulnerability at an unnamed financial institution.

The unnamed institution were sponsored into the platform by payment processing firm Cuscal, who said the issue was identified and resolved immediately.

The affected data included PayID name and account numbers, of which NPP said: “none of the details involved can, on their own, enable the withdrawal of funds from a customer’s account without the customer’s specific further involvement.”

Furthermore, fintech within Australia continues to embark on a period of growth, in spite of the delays to open banking following a collaboration with a myriad of renowned UK companies, which were sent to Australia by the UK’s Department for International Trade (DIT) to form part of the UK-Australia FinTech Bridge Pilot Programme.

Having launched in March 2018, the UK-Australia Fintech Bridge aimed to strengthen engagement on fintech policy and regulation; facilitate trade flows and access to capital opportunities; and address barriers to international growth and has since aided in the forging of strong links between the fintech ecosystems of both countries.