27 Jun 2019

Open Banking is on its way and now is your chance to comment

By Ken Saurajen, Daniel Moradian

The Government is seeking submissions from interested parties in implementing the Consumer Data Right in the banking sector.

Consultation on Open Banking designation instrument

The Government has released for public consultation the second version of a draft Designation Instrument for the application of the Consumer Data Right (CDR) to the banking sector (Open Banking). Managers need to carefully assess the impact of the CDR on their businesses as the CDR has the potential to significantly increase obligations relating to data storage and disclosure, and to disrupt existing business models. Time is of the essence for the banking sector, which will be the first sector to feel the impact of the CDR.

What is the CDR?

The CDR gives Australians greater control over their data, empowering customers to choose to share their data with trusted recipients and only for purposes that they have authorised. Individuals and businesses will be able to access specified data held by businesses which relate to them and to authorise secure access to this data by accredited third parties. Businesses will be required to provide public access to information on specified products they have on offer (such as the pricing and terms of all mortgages on offer (for the banking sector)).

The Treasury Laws Amendment (Consumer Data Right) Bill 2019 is currently before parliament and it will amend the Competition and Consumer Act 2010, the Privacy Act 1988, and the Australian Information Commissioner Act 2010 to establish a CDR. Treasury is seeking submissions on the Consumer Data Right (Authorised Deposit-Taking Institutions) Designation 2019 (Designation Instrument) which specifically relates to the impact of the CDR on the banking sector.

The CDR will first be implemented in the banking sector followed by the energy and the telecommunications sectors. Eventually the CDR will be rolled out economy-wide on a sector-by-sector basis.

Open Banking

The first stage of the Open Banking consultation was held from 23 September 2018 to 12 October 2018. The second stage of the consultation is currently open and responds to concerns raised in the first stage regarding the scope of information about the use of a product. Information which meets the test of having been "materially enhanced" will be carved out of scope. Materially enhanced information is information whose value has been largely generated by the actions of the data holder. Data holders may not be required to disclose such materially enhanced data, but may be authorised to disclose it through the CDR if they so wish.

Next steps

The Treasury has uploaded the draft Designation Instrument which lists banking data sets that are not considered materially enhanced, as well as an explanatory statement which lists data sets that are materially enhanced. The Treasury is seeking examples to add data sets to these lists and such data sets may be included in your submissions. The consultation remains open until 12 July 2019 and submissions may be lodged via post or via email at data@treasury.gov.au.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.