Australian fintech companies have called on the the Government to hold the line on the introduction of open banking reforms in the face of a hostile push-back from some of the countries top banks.
The Australian Banking Association alongside Westpac and Commonwealth Bank have urged the Government to delay plans for Open Banking and limit its scope to exclude lending products, citing high costs and security issues.
In response, trade association Fintech Australia has set out its own demands to the Government, arguing that the first phase of any open banking regime should include:
• Both deposit and lending products (such as credit cards and mortgages)
• A 12-month implementation timeframe
• Personalised product information including interest rates and fees and charges applicable to each account
• Small-to-medium sized business and joint accounts
It has also called for a formal role for the Australian Competition and Consumer Commission "to stop knee-jerk anti-competitive measures by banks".
In addition, FinTech Australia is also strongly advocating for the Government to set a timeframe for the introduction of superannuation and insurance into open banking, after the first phase.
ZipMoney chief strategy officer Tommy Mermelshtayn says the hostile tone adopted by banks in response to the consultations has clearly outlined the need for reform.
“Putting the power back into a consumer’s hands to drive competition and better customer outcomes is the intention of open banking, and there is serious risk these benefits will not be achieved on day one if the rhetoric from the big banks wins out,” he says.
Peter Lalor, CEO of PFM startup MoneyBrilliant, says that the inclusion of lending products at the first stage would help people to get a better deal on their credit card, personal loans and mortgages.
“The Australian Competition and Consumer Commission stated in an interim report in March that price competition between major banks in the $1.6 trillion home loan market had been ‘less than vigorous’,” he says. “Banks are trying to delay the introduction of lending products into an open banking regime, simply because these are the most lucrative areas of their business and because switching is easiest in credit cards and mortgages. We urge the Australian Government to hold the line and put Australia in a world-leading position with its open banking regime.”