A presentation from APIDays Melbourne 2019 on the Australian Open Banking exeperience.
Open Banking In Australia
The Fintech Perspective
Opportunities and challenges
for Fintech startups in the
Open Banking age.
Hi, my name is Alan Tsen
• I’m a recovering lawyer (don’t hold it against
• Currently, I’m the Chair of Fintech Australia.
We’re Australia’s leading Fintech industry
• Former GM Stone & Chalk, Melbourne.
• Founder of Fintech Victoria.
• Also, was a part of the Federal Government’s
Fintech Advisory Group and a member of
ASIC’s Digital Finance Advisory Committee
and lead Fintech Australia’s working group
on Open Banking.
• Angel investor in early stage Fintech
startups. Come talk to me if you’re an early
• The Consumer Data Right (CDR) is going
to be a huge transformation for the
Australian economy… but it’ll take time.
• Fintech startups will lead the disruption.
• Open Banking is but one part of the
puzzle and the real break outs will occur
when other industries come on board in
• New exciting products will emerge that
will make consumers’ lives better.
• There are still near term challenges as
the regime is implemented.
• Open banking will be a ‘narrative
disruption’ in ﬁnancial services. It’ll
reduce data moats and change the way
consumers interact with the industry.
• It’s been a long road to get to where we are
today with the CDR. The journey started
with the Murray (2014) and the Harper
• Both recognised the role opening up data
could play in improving ﬁnancial
• However, the really foundational work was
done by the Productivity Commission in its
Data Availability and Use Inquiry (2017).
• This proposed a bold economy wide CDR
to give individuals and SMEs greater
access to their data.
• This culminated in the Farrell Report (2018)
which provided the how a CDR could be
established. The Federal Government has
agreed to the recommendations made in
the report and implementation began.
• The Farrell Report can be summarised in
four principles that are informative in
understanding the CDR (and thus Open
• Customer-focused - it’s for them and
• Competition enhancing - to increase
competition in banking products in
services, so customer have more choices.
• Opportunity creating - to provide a fertile
ground for new ideas and businesses to
emerge in the data economy.
• Efﬁcient and balanced - should take into
account security and privacy. Should be
fair and efﬁcient in design.
• It’s important to note it will start with
banking and move to energy and
• But what do we mean by Open Banking?
• Customer data will have to be shared by data
providers at the request of the customer with
• The data recipients will need to be accredited
and have clear customer consent to that
• The data will be across product, customer and
• Mechanically, the framework is brought to bear
• Legislation which instantiates the Open
Banking regime (Treasury)
• Rules which outlines the principles,
requirements and outcomes for the
application of Open Banking (ACCC); and
• Standards which set out the technical
method of implementation (Data61 - Data
• The ﬁrst stage of the CDR was enacted into law
in August 2019. A designation was passed in
September which identiﬁed Banking as the ﬁrst
• The ACCC released their 'locked down’ version of
the proposed rules this month.
• The standards are being worked on by Data61 and
are in draft form.
• July 2019 marked the beginning of the regime
with the 4 major banks required to provide
product reference data on accounts.
• February 2020 will be when the 4 major banks
will need to make data on transaction, credit and
debit card, deposits and transactions accounts
• July 2020 the major 4 banks will also make data
available on mortgage accounts. Other ADIs will
need to make product data on accounts available.
• February 2021 the major 4 will need to make
transaction data available on all covered products.
• The promise is that Open Banking will
drive more consumer choice, lower
costs to consumers and improve
competition in ﬁnancial services.
• This Cambrian Explosion of new use
cases will make banking more
transparent and provide Fintech
startups with an opportunity to compete
• If you believe that data is the new oil,
Open Banking should result in it
becoming the new salt.
• But how are startups thinking about
Open Banking? What are the likely use
cases to emerge in the space?
• Is this going to be a narrative violation
or a narrative continuation?
• The UK experience has taught us that
it will take time.
• We’re not there yet. Still work to be
done for the regime to really work for
Fintech startups. Some are near
term - eg. assurance program, role of
• While others are longer term
questions - eg tiered accreditation.
• Costs associated with accreditation is
still a potential challenge.
• But overall the Open Banking regime
provides a glimpse into the future as
Australia moves towards a true
• The current narrative is that startups
struggle to compete with
incumbents due to resources,
capability and scale.
• The narrative is already being
violated as we see startups take on
incumbent banks - eg. Revolut has
hit 6 million customer globally.
• Open Banking will spur this trend as
greater access to data will begin to
level the playing ﬁeld for startups and
allow for more data driven products.
• But there is a huge opportunity for
incumbents to partner with startups
- eg. Bud and ANZ.
Email: [email protected]