Open banking stalemate
The banks are facing off with fintechs in the debate over the failure and future of open banking in Australia. Either way, the regime faces obvious challenges.
Just what is going on with the Consumer Data Right (CDR)? Or “open banking” as it is known in financial services?
The banks last week launched a hit job on the regime, timed to appear in The Australian Financial Review on the day of FinTech Australia’s sold out CDR Summit, while the government deferred a key piece of legislation enabling more features until August.
There are some obvious reasons: the banks argue they’ve paid $1.5 billion to set it up but they’re not making any money from it — or, as they say, “challenges in policy and standards design, and implementation have impeded the CDR’s success”.
Even the smaller banks, for whom open banking in other markets has levelled the playing field, are not seeing value. Customer Owned Banking Association CEO Michael Lawrence said while the sector supported the intent, “it has actually made it more difficult for smaller banks to compete by tying up resources with little to no tangible return”.
