Australians will own their banking and internet data under new legislation

The Australian Competition and Consumer Commission and the Office of the Australian Information Commissioner will be charged with overseeing the new Consumer Data Right.

New legislation to be introduced by the Australian government will see consumers "owning" their data, granting them open access to their banking, energy, phone, and internet transactions.

The Consumer Data Right will allow consumers to access particular data, including transaction and product usage data, in a digital format, and will also allow the consumer to direct a business or government agency to transfer that data to a third party.

Initially, the rollout of the Consumer Data Right will occur in the banking, energy, and telecommunications sectors, with future sectors, including publicly-funded services, to be rolled out on a sector-by-sector basis.

The legislation, touted by Assistant Minister for Cities and Digital Transformation Angus Taylor as the biggest reform to consumer law in a generation, comes following a Productivity Commission Inquiry that looked in competition in Australia's financial system.

Making 41 recommendations in total, a report from the Productivity Commission's Data Availability and Use inquiry called for an open-data practice be implemented.

"Government is pursuing the very simple idea that the customer should own their own data. It is a powerful idea and a very important one," Taylor said in a statement at the weekend.

"Australians have been missing out because it's too hard to switch to something better. You may be able to access your recent banking transactions, or compare this quarter's energy bill to the last, but it sure isn't quick or easy to work out if you can get a better deal elsewhere."

According to the government, its new legislation is "broadly consistent" with the commission's recommendations, with both the Australian Competition and Consumer Commission (ACCC) and the Office of the Australian Information Commissioner (OAIC) regulating different aspects of the scheme.

Involving both regulators is expected to balance competition while adhering to privacy policy frameworks, the main hesitation Australia's banking sector claims in the open data debate.

Facing the House of Representatives Standing Committee on Economics and its probe into the country's big four banks, Brian Hartzer, CEO of Westpac, said in March his bank was supportive of the impending mandate to open customer data, but concerned with the vulnerabilities this may incite from a security perspective.

"Westpac supports enhanced data sharing, but at the same time, it's important we get the implementation of data sharing with third parties right in order to protect our customers from fraud, privacy breaches, and inappropriate use of their data," Hartzer said at the time.

"A significant data breach under a new regime would undermine trust and confidence in data sharing and ultimately impact our shared objective of increasing transparency and innovation in the sector."

It was a similar story for the Commonwealth Bank of Australia (CBA), the National Australia Bank, and the Australia and New Zealand Banking Group, with CBA's outgoing CEO Ian Narev asking previously for clear guidelines on who exactly is accountable for privacy and security under an open banking regime.

"The bottom line is, this is going to happen and we accept that, and we think competition is good for us," Narev told the Economics Committee.

Hartzer was keen to see the banking sector lead the open data reforms, but the idea was dismissed by the committee chair, given the big four banks hold a 95 percent share of the entire Australian finance industry.

The government announced the independent Open Banking Review in the 2017-18 Budget, with the desired outcome of increasing access to banking product and consumer data by consumers and third parties.

The review is due to report by the end of 2017, and it is expected the findings will guide the implementation of the Consumer Data Right.

Speaking at Australia's Asian Future Summit 2017 in Sydney earlier this year, Australian Treasurer Scott Morrison said the open banking initiative is one that will change the country's economy.

"One of the biggest changes we can make, which links into the broader technology in this space, is consumer data rights and the Productivity Commission -- that is one of the big rocks in the jar for really lifting Australia's productivity over the next 20 years, and that is giving customers control of their information," he said.

"That is the building block that every fintech, that every technology company -- every company -- needs to be able to find a better deal and deliver a better service.

"That will change our economy."

Where energy is concerned, the Consumer Data Right will be consistent with the recommendation made by the Independent Review into the Future Security of the National Electricity Market, and agreed to by the Council of Australian Governments, to improve consumers' ability to access and share their energy data.

Similarly, in the telecommunications industry, the Consumer Data Right will help consumers identify the most appropriate plan for them in the market, matching their actual service usage against their budget.

"It won't be far down the track when you can simply tap your smartphone to switch from one bank to another, to a cheaper internet plan, or between energy companies. Government is lifting the lid on competition in consumer services and technology is the enabler," Assistant Minister Taylor added.

New Commonwealth legislation to give effect to these reforms will be brought forward in 2018.

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