Open Banking in Australia hampered by ‘data reliability’ and implementation issues

Australia is “still at the beginning” of its Open Banking journey, with banks “slow” to become Accredited Data Recipients (ADRs) and “reliable access to consumer and business banking data” still required, according to a new report.

The ‘Australian Open Banking Ecosystem Map & Report’ published by Open Finance Advisors in collaboration with FinTech Australia, FDATA ANZ and Open Finance ANZ, provides insight into the ecosystem’s growth through the Consumer Data Right (CDR) over the past two and a half years.

In his foreword, Brenton Charnley, CEO and founder of Open Finance Advisors, said ongoing data reliability issues and implementation gaps for 90% of Data Holders “mean that the compliance phase is not yet finished”.

He also wrote that “problematic coverage and consent flows for business accounts are impeding SME use cases”.

According to the report, the current consent framework for business account owners to opt in for Open Banking is “poor, with lengthy and sometimes offline processes”.

Elsewhere in the ecosystem, banks are “slow to become ADRs”, with only 11% of Data Holders having become ADRs, despite the simplified accreditation pathway available.

ADR is considered the highest level of accreditation, defined as “a business that has been fully accredited by the Australian Competition and Consumer Commission (ACCC)”, the report stated.

However, as reported by Australia’s Treasury, 95% of Data Holders are now active and 99% reported consumer bank account coverage.

The report also pointed to a 280% year-on-year increase in Data Recipients between 2021 and 2022, which it attributed to the introduction of new access models, such as CDR Representatives.

Charnley has called on the ecosystem to focus on the number of unique completed consumer consents, on the basis that this takes into account two important requirements for Open Banking success.

“Firstly, coverage (can a consumer get data from the bank when requested); and secondly conversion (is it easy to use and can the consumer complete the journey). Consumer usage is the ultimate validation of the CDR as a technology solution,” Charnley said in his foreword.

Bringing use cases to life

“Whilst the Consumer Data Right’s ambition is to open up finance more broadly, we haven’t yet finished Open Banking,” said Charnley.

“There is plenty more to do to make Open Banking a success in Australia starting with reliable access to consumer and business banking data. We are now entering an exciting phase where use cases will come to life facilitated by technology companies, incumbent banks and financial services businesses.”

FDATA ANZ’s Mat Mytka

Mat Mytka, regional director of FDATA ANZ, said: “The scope of CDR presents extraordinary opportunities for innovation across policy, regulations, and the products, services and business models that can help everyday Australians.

“The world is watching at this phase in its evolution as Open Data initiatives and responsible technology development build in momentum globally.”

Charnley founded Open Finance Advisors in November 2022, to help businesses develop their Open Banking strategy through Australia’s CDR.

He was previously CEO of TrueLayer ANZ, which paused operations in the country in October last year.