Building Better Banking: CDR, Transparency, and a world of Open Banking
By Ingrid Schnell, Industry Chief Technologist
Opening doors to the future
A lot has happened – both to the world of banking and the world in general – since the Australian Federal Government, in May 2017, announced its support for an Open Banking system and commissioned a review. In July 2020, the Consumer Data Rights (CDR) finally became law.
The CDR has enormous implications for the ‘big four’ Australian banks and accredited providers, who have greeted it cautiously. It is a catalyst for disruption, and in the digital economy, data sharing is the new normal.
DXC believes the CDR has the potential to drive nothing less than a revolution in the Australian banking landscape; a change for the better, to make Australian banks more competitive on a global scale. Leveraged smartly and creatively, the CDR can help banks provide smarter and more relevant services to their customers and create banking products that weren’t previously possible. Above all, it’s a significant opportunity to reposition ‘The Bank’ as a fundamental pillar of every Australian’s life.
Today’s environment is one of excitement and opportunity, tempered by risk-awareness and a keen desire to keep an eye on what others are doing. For banks that see CDR more as an opportunity than a threat: how can you grasp that opportunity – and how can you grasp it quickly and confidently, and use it to differentiate competitively?
Open Banking
It’s important to understand Open Banking not in isolation but as part of the wider CDR agenda, which is key to unlocking innovation, competition and a revolutionising of the Australian consumer digital landscape.
Open Banking isn’t a particularly new concept – it has been in the European lexicon as early as 2010 and widely used since late 2015, when the European Parliament adopted a revised Payment Services Directive, commonly referred to as the PSD2.
The parallels with Europe can be instructive for Australian banks. European banks were at first hesitant to dive headfirst into the PSD2. However, over the past five years, banks across Europe have made significant headway in incorporating Open Banking and reaping the rewards it can offer.
In the United Kingdom, for example, Lloyds Commercial Banking has seen the value collaborating with FinTechs can bring and have adapted their approach to improving how they collaborate with potential partners. A recent example of this includes successful collaboration with Xelix - a platform that uses machine learning to enhance validation and decision-making process within a business’ accounts payable.