When non-banks provide data, banks will potentially be able to use it to their advantage to win new customers.
The take-up of open banking has been slow due to the low number of data recipients that have gained accreditation from the Australian Competition and Consumer Commission, which has set a high bar for participation.
However, use is expected to increase now data intermediaries and professional advisers can stand between fintechs and data providers.
Treasury has asked for submissions on the extension to non-bank lending by April 12. The government plans to extend it to “merchant acquiring” (payments), general insurance and superannuation sectors via separate consultation processes to be completed this year.
The consultation paper describes the reforms as a “new pillar of competition policy” and consumer data rights as a “fundamental right for Australian consumers and businesses to have power over data generated about them; to share and extract value from this data, and help to access the many benefits of progress in digital infrastructure and capability”.
Start-ups want Treasury to back the data rights extension with more focused support for those seeking to use it.
Simone Joyce, CEO of Paypa Plane, a payment service provider, said the government should be more targeted when deploying the R&D tax concession to support companies looking to invent new services with the data rights.
“The ongoing implementation and adoption of the consumer data right and the payments regulation review must not be allowed to stagnate, which is why Treasury needs specific funding to ensure recommendations are properly executed,” she said.
“An allowance would ensure that Treasury can delegate and organise action plans and tasks to ensure this.”
FinTech Australia CEO Andrew Porter said in an email to members this week that an increase in R&D spending would “bring Australia in line with other leading OECD countries. In addition, a focus on this spending on earlier stage businesses, where the impact of the spend will be greater.”
The Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, said the government is keen to consult non-banks on the data sets to “ensure we build a high-value and robust data access system together”.
Extending the consumer data right to merchant acquiring could improve product comparison using card transaction data.
“It’s not just about in-sector product comparison any more, it’s about having the ability to optimise your life or your business based on your actual data and insights drawn from an increasing number of data sets,” Ms Hume told the Committee for Economic Development of Australia last month.
