Bank customers will be able to shop around for a better deal under a Federal Budget proposal that allows them to share their data with competitors.
The measure, announced by Treasurer Scott Morrison as part of Tuesday night's Budget, is intended to increase competition in a sector that is
currently the focus of more than a dozen inquiries.
Customers will be able to request their data be forwarded to rival banks in an effort to determine if they stand to benefit from better-priced
The data could be used by third-party sites (example pictured below) to compare the range of
products offered by banks, such as savings accounts, credit cards and even
ABOVE: Snapshot of credit card providers alongside interest rates, yearly fees and the amount you could stand to save each year.
The sharing of open data is expected to "facilitate choice" between banks and "encourage new entrants to the banking sector".
Additional funding will be provided to the ACCC "to undertake regular in-depth inquiries into financial sector competition issues".
The announcement follows the publication of a Productivity Commission
report that called for an overhaul of Australia's data sharing policy and
Each business would use systems compliant with an application programming
interface (API), under the report's recommendations, making it possible to easily share
user data across different business systems.
Giving consumers control over their data will pave the way for a range of
innovative products, says Angus Taylor, assistant minister for cities and
"Empowering citizens, governments, industries and researchers to use and
share data will boost transparency - igniting competition and innovation," he says.
"The government recognises first and foremost that the community must trust
and accept any reforms to Australia's data system."
Reforms recommended by the Productivity Commission include appointing a
National Data Custodian to accredit public entities to release data to
trusted users, to designate National Interest Datasets, and provide
guidance on privacy, de-identification and security.
The use of open data needs to be geared towards empowering consumers, says
Xavier O'Halloran, policy and campaigns advisor at CHOICE.
"Data is one of our most valuable resources, but currently it's locked away
in big government and corporate servers. The Productivity Commission wants
to set this data free, so it can be used to benefit consumers.
"This could be for everything from making it easier to find a more
affordable credit card or insurance product, to linking up social welfare
and housing data, to better address housing affordability.
"The focus needs to be on empowering consumers to use their data to make
better purchasing decisions."