From 1 July, open banking will begin to roll out across the finance sector to give consumers greater control over their own bank data, find better deals and make it easier to switch banks.
What is open banking?
Open banking facilitates the secure exchange of customer information between financial institutions via a digital platform, with customer consent.
This is expected to encourage competition, empower consumers to negotiate better deals and save money.
How does it affect me?
For anyone looking to refinance their loan or switch financial institutions, open banking will make the process faster, easier and more transparent.
By choosing to share your financial data, including spending history and direct debits, lenders will be able to put together a more comprehensive view of your financial position.
If your financial background is strong, you might get rewarded with special offers customised to your individual circumstances.
What do I need to do?
Once open banking comes into effect, you will need to consent for your current bank to share your bank data – that’s it! There will be no extra cost, and you can choose not to consent.
While the big four banks must make data available on credit and debit card, deposit and transaction accounts from 1 July 2019, open banking regulation will not come into full effect until mid-2021.
The change results from the 2017 Productivity Commission’s focus on consumers’ rights to manage their own data.