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Consumer Action Law Centre, Financial Rights Legal Centre and Financial Counselling Australia are pleased to make this submission in response to the Open Banking Review Issues Paper.

We acknowledge that increased access for consumers to their own data has the potential to create consumer benefit, as outlined in the Issues Paper. If appropriate safeguards are put in place, Open Banking could make it easier for consumers to find better deals, and reduce the costs and inconvenience of switching financial service providers. It could also make personal budgeting much more straightforward. However, we are concerned that the Issues Paper has focused heavily on the promised ‘benefits’ of Open Banking, without giving significant weight to the potential costs and risks to consumers. In fact, the ‘costs and risks associated with change’ outlined in the Issues Paper relate only to potential costs to business.

While Open Banking offers opportunities to consumers, it also poses significant risks. Robust legal frameworks and regulatory oversight will be required to ensure that consumers are adequately protected and able to benefit from the Open Banking regime. Data sharing, competition and innovation in the financial system should be considered a means to deliver benefits to consumers, but not an end itself. We urge the Review to consider the potential costs and risks to consumers, and the regulation needed to mitigate these, in much further detail.

As the Issues Paper has already outlined many of the potential benefits of Open Banking to consumers, we have limited our submission to some of the potential risks and costs.

Read the full submission here [PDF].