Conductor needed as open banking standards kick off
A centralised body will be key to coordinate the move to an open banking framework as the new draft standards were released by the Data Standards Body.
This is the view of Ernst & Young Oceana financial services technology leader, Mike Orman.
Orman who focuses on open banking and other technology-driven changes in the market, said that the standards were what he expected but more work is needed to be done particularly in tasking a group to coordinate the initiative.
The draft standards underpin the Consumer Data Right which give people greater control of their data and are the basis for businesses to starting building APIs.
“The publication of the draft standards represents a culmination of a great deal of work and will serve as a solid foundation. But even by the standards body admission there are gaps and significant additional work is needed which is not surprising,” Orman said.
“The greatest challenge for the rapid adoption of open banking is the lack of an implementation entity which will manage all the streams of activity in particular the quality and cost outcomes while managing the risk and security concerns,” he added.
Orman acknowledged that there was an “extremely talented orchestra” of groups involved in its initiative– including Federal Treasury, the ACCC, the Office of the Australian Information Commissioner and Data 61.
However, there is no “conductor to manage “those various talented groups”.
It is a lesson, he believes Australia could take from the UK experience. The UK which moved to open banking earlier this year did adopt an implementation entity which was effective.
He is certain that “conversations are occurring in this market with the possibility” of setting up a similar body.
Concerns in the industry have merged with regards to the tighter deadline for open banking – which is scheduled for 1 July 2019.
Here a central body will be key.
“The odds are better to hit a deadline when you have a group pulling together a complicated group of constituents. But that’s not to say that as it is structured today it can’t be hit. But it may not be able to.”
He also believes that Australia’s approach will focus on ensuring a better user experience, an issue that was lacking in the UK.
“Many would agree that the UK standards led to a complicated user experience and is something that has been taken into account in Australia.”
Australia’s open banking regime has also acknowledged the evolving nature of technology and the implications for security.
“Technology is always evolving. The nature of security also continue to evolve quickly which it has since the UK standards were defined. The standards here will be tighter than the UK.”
Building the APis
Echoing views made by the open banking architect, King & Wood Mallesons partner Scott Farrell, Orman also acknowledged that Australia’s open banking regime is a much broader data framework which included the energy and telecommunications industry.
“The additional industry groups will foster greater competition and opportunity for consumers to participate in managing their data.”
Feedback on the standards is due on the 23 of November.
Ross Sharrott, founder, CTO and managing director for Australia at Moneytree, does not expect to see any sweeping differences to the draft standards.
“Even though the final draft is not due until Christmas, I’d say this is a fairly complete draft,” Sharrott said.
Sharrott, a member of the Advisory Committee of the Data Standards Body, added that the draft standards are enough for the technology teams to start laying the infrastructure for the start of Open Banking.
“If they want to be ready for the July deadline, they need to build the APIs now in order to commence their user acceptance testing in February or March at the latest.”