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Banking Explained: What is Open Banking?

How Open Banking is set to help Australians manage their banking

Australian consumers are set to gain unprecedented access and control of their personal financial data as the Australian Government and banks continue the roll out of the Open Banking system.

Under Open Banking, consumers will be able to demand that their current bank transfer their data to an accredited third-party. These data include things such as account balances, transaction information and fees and charges.

Key Facts
• Open Banking is being implemented by Government and Australia’s financial services providers.
• It will give consumers access to their personal financial data and allow them to share it with an accredited third party.
• Open Banking is designed to create more competition in banking and improve consumer outcomes.

The customer owned banking sector has said the system will lead to better customer outcomes for Australians because it will make it easier to find a better financial product to meet their needs.

Customer Owned Banking Association Director of Strategy Sally Mackenzie said this will make it a lot easier for consumers to shop around for a better deal.

“With the Open Banking system, a trusted third party will be able to analyse all your financial data and recommend a product that is right for you, based on the way that you spend and save.

“Open Banking puts the consumer in charge. They get to control their data and decide who to give it to and if they want to.

“It will also be good for competition. Credit unions, mutual banks and building societies often have lower rates, fees and charges. But the time it takes to compare the different options can be overwhelming for busy consumers.

“Open Banking will make it a lot easier for consumers to look beyond the Big 4 and get themselves a better deal.

“It will make switching banks a whole lot easier,” said Ms Mackenzie.

The Open Banking roll out is being progressed with a stringent focus on information security to ensure that sensitive information remains protected.

“It’s important that this sort of program is rolled out properly and safely. Consumers need to be able to have confidence that their information is secure,” said Ms Mackenzie.

The Open Banking system is expected to be fully implemented by 1 July 2021 when all banks will be required to comply with the data requirements.


Media Contacts

Ashley Penny
Corporate Affairs Manager
P: +61 2 8035 8444
M: +61 431 932 950
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