Despite advancements in technology allowing customers to switch banks and take their account numbers with them, the Commonwealth Bank of Australia (CBA) has said that it is still opposed to the practice, citing data security concerns and the misfortune of previous technology projects as its main rationale.
On day one of the inaugural House of Representatives Standing Committee on Economics' review of Australia's four major banks, committee chair, Federal Member for Banks David Coleman, urged the committee at length to look at ways of giving consumers more power over their bank and more ways for consumers to change to better providers.
One such measure, Coleman explained, would be to allow customers to port their account numbers over to another bank. Pointing to previous remarks made by the bank, Coleman asked CBA chief executive officer Ian Narev and chief risk officer David Cohen if the bank was still opposed to account number portability.
"Our view, expressly stated, has been any major organisation of any sort ... that rests its future on trying to keep competition out will simply not succeed," Narev said.
"The absolute priority for us is to make sure we are fully supportive of power being put in the hands of customers."
While Narev agreed that the broad proposition of making the practice of things like bank account portability work is in the spirit of competition and consumer control, he said that CBA needs to first make sure that the discussions and detail about how such services are delivered do actually achieve that goal.
"We need to make sure that in terms of access to data, security of data, how the data are used those principles are absolutely sacrosanct," Narev said.
"We spend an inordinate amount of time and money safeguarding the security of our customers' data and safeguarding the security of their accounts."
Coleman said that historically, banks raised concerns over inadequate technology being the reason for the inability of customers to port their bank accounts.
"This arose some years ago," Coleman added. "Technology has obviously moved on, and it seems to me that this is something that should be assessed again."
Pointing to a report published in 2011 by former Governor of the Reserve Bank of Australia (RBA) Bernie Fraser, Cohen said that one of the issues that arose in Fraser's report is still relevant today and needs to be thought of when discussing portability.
"That issue is that implementing large technology projects across an industry has in the past been fraught with misfortune. So the point made then, which I think still applies today, is: provided we get the security right, the confidentiality and the privacy right, through technology, then I think the information-sharing economy is going to come into play here, definitely," Cohen said.
"But the important thing also is that it applied to all institutions."
Cohen added that one of the lessons from the past is that smaller institutions have struggled when seeking to implement big technology projects.
"Not because they are poor within themselves but simply because the resources required are significant when implementing an industry-wide program," he said. "So the only point I think we would make is that consultation on how to do it is extremely important, and sufficient lead time to do it is extremely important."
Narev did confirm, however, that if the Australian Securities and Investments Commission (ASIC) had such a mandate to require the opening of data and the opening up of information so as to enable consumers to ditch their bank, CBA would work cooperatively and constructively with that process.
"If that were to be the mandate, we would engage very constructively with whomever our elected representatives asked to take oversight of implementing it," Narev said.
"We absolutely would -- in the same way as we have worked very constructively with the Reserve Bank on the building of the new payments platform."
Last month, the RBA confirmed that the new payments platform will allow for near real-time funds transfer between bank accounts, regardless of who people bank with.
Also addressing the House of Representatives Standing Committee on Economics, RBA Governor Dr Philip Lowe explained that all a user will require to perform an "instantaneous payment" with the forthcoming system will be the recipient's email address or mobile phone number instead of the bank account number or BSB.