Government unveils plans for Open Finance
The government has announced plans to expand the Consumer Data Right to “Open Finance”, which it says will enable consumers to better compare financial products across insurance, superannuation and non-bank lending services.
In a public announcement this week, Treasurer Josh Frydenberg said the government is expanding the Consumer Data Right to the telecommunications sector and also outlined plans to build upon its open banking measures by extending the Consumer Data Right to more financial products.
The Consumer Data Right allows consumers to control the use of their data by trusted third parties so they can more easily compare products and find a better deal.
Mr Frydenberg said telecommunications is the third sector to be covered by the Consumer Data Right, following its application to the banking sector and expansion to the energy sector.
“After telecommunications, the next step will be to expand the Consumer Data Right to ‘Open Finance’, building on the success of Open Banking. Open Finance will allow consumers to compare and save across a greater range of financial products covering not only banking, but also general insurance, superannuation, merchant acquiring and non-bank lending service providers,” Mr Frydenberg explained.
“Open Finance paves the way for the creation of new and innovative services such as personal finance and life administration apps to take the time, cost and complexity out of everyday tasks and big financial decisions for consumers. Combining Open Finance datasets with banking transaction data can also provide a consumer with a more holistic picture of their financial circumstances that is all held in the one place.”
Mr Frydenberg said Open Finance would enable, with a consumers’ consent, an accredited budgeting app to provide the consumer with services based on data shared from their bank, energy or telecommunications provider, as well as information and insights relating to their general insurance, non-bank lending or superannuation.
“This could help consumers achieve savings goals, get better deals and change their consumption behaviours to better suit their lifestyle and needs,” the release said.
The government said it would shortly commence consultations with industry and government stakeholders on the rules to ensure Open Finance delivers the best outcomes for consumers and encourages innovation.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.