Open Data in Australia: Lessons from the UK implementation

By Paul Anguita, Manager Member Engagement at AusPayNet - 5 October 2018

Open data is gaining real momentum in Australia with the formation of the Data Standards Body (DSB) and the phased implementation of open banking by 1 July 2019.

In September, David Beardmore, Commercial Director of the Open Data Institute (ODI) UK, presented to AusPayNet members on this topic. He provided an update of the status of open banking in the UK and around the globe.

What is Open Banking?

It’s a secure set of rules, technologies and common standards that allow customers to give companies, other than their bank, the permission to securely access their account related (transactional) data.

Open banking is possible due to the Consumer Data Right (CDR) legislation, which will give consumers control and ownership over their data. Australia is applying this legislation to the banking sector first, with other industries, such as telecommunications and energy, to follow.

UK Background

To begin, David provided background on the origins of UK open banking. The Competition and Markets Authority (CMA) published a report in August 2016, which established a way forward for open banking.

The scope the CMA set was limited, with the rules applying to nine of the banks and to current accounts only. Furthermore, the timelines were ambitious, and ultimately only three of the banks met 13 January 2018 deadline (read/write APIs), with five of the other banks not far off.
 
Since then, the scope has become more ambitious, including more accounts, cards, and payment initiation.

UK Open Banking Update 

David next addressed some of the use cases that are coming out of the UK implementation. These included:

• Personal finance dashboards/account aggregation 
• Current account comparison sites 
• More accurate and faster credit decisions
• Better decisions and pricing for insurance
• Recommendations for cheaper finance options
   

There are currently 49 Third Party Providers (TPPs) in the UK directory. These are organisations who are certified to access consumer banking data if they have the consumer’s consent. Out of these 49 organisations, 31 are Account Information Service Providers (AISPs), 17 are both AISP’s and Payment Initiation Service Providers (PISPs), & 1 is only a PISP.

International Perspective 

Other countries around the world with open banking initiatives include Canada, USA, Mexico, Brazil, Israel, Kenya, Japan, Hong Kong, Malaysia / Singapore, Australia, and New Zealand.

The common themes that are emerging from these countries are:

• The rationale for open banking 
  • Increasing competition in the banking industry
  • Stimulating innovation 
  • Increasing customer control over their data
  • Financial inclusion & reducing poverty
• The role of regulation
• The need for common standards

In David’s opinion, Mexico & Australia seem to be the most advanced in implementing open banking (after the UK) amongst these countries.

The Future 

The DSB is working actively on developing standards for the Consumer Data Right.  The detail on the work of the Advisory Committee to the DSB, on which AusPayNet’s Chief Operating Officer Andy White sits, is available here. The collaborative space for the work of its working groups is available here.

Alongside this work, Treasury is consulting on the underpinning legislation and ACCC on the rules framework.

For more information , please get in touch.