Opening Up Finance in Australia and Achieving Global Open Banking Interoperability

On Friday 12 February 2021, in my new role as TrueLayer’s Head of Australia, I gave expert evidence to the Australian Senate Select Committee on Financial Technology and Regulatory Technology chaired by Sen. Andrew Bragg.

On behalf of TrueLayer, I shared the concern that, unless simplified, the current open banking framework – the Consumer Data Right (CDR) regime - will only work for the big banks, narrow prescribed use cases, and select organisations that are willing and able to incur the significant time burden and costs of becoming accredited. TrueLayer’s key submissions to the Committee were:

1. To accelerate the introduction of the Affiliate/Sponsor rules;
2. To accelerate the introduction of rules to enable “write access” in banking using Payment Initiation; and
3. To enable consumers to share their data with whomever they choose, or at a minimum, allowing data to be shared with Trusted Advisors.

These comments are consistent with the findings of Scott Farrell’s “Future Directions for the Consumer Data Right” report (which was released on 23 December 2020) and are based on TrueLayer’s open banking experience in the UK over the last four years.

Without enabling intermediaries like TrueLayer to support large and small companies to participate in the CDR, we think Australia will experience slow uptake by businesses and consumers. Here is a quote from my opening statement to the Committee: 

"The complexity of the current CDR regime creates undue barriers to entry and will stifle competition and innovation. We understand the need for a secure, safe and well-regulated system, but don’t believe this stands in contrast with allowing broader participation – as we have seen in Europe.”

Senator Bragg was interested to hear back from TrueLayer, on how the government should be setting up the CDR in order for it to be globally interoperable. The Senator said this was a “high priority.”

Other recommendations TrueLayer made included:

• broadening the use of the enhanced ASIC sandbox, in particular for Payment Initiation to enable faster testing and recognition of the CDR; and
• accreditation for participation on the New Payments Platform (NPP) should it be selected for CDR write access rather than an overlay service.

To find out more about TrueLayer's submissions and plans for Australia, please get in touch.