Dobson explains at a basic level open data is giving consumers the right to ask institutions holding their data to transfer that data to a third party.
“Open data is really talking about a data economy,” he says. “Open banking is closely related – bank customers can give consent to their credential data, their transaction data and their product data to be moved to another organisation.”
ANZ and Westpac have been asked to pioneer open banking. By July 2019 the banks will go to market with an open banking proposition.
“Open banking allows a number of non-bank or fintechs companies into the market to use the customer data in a way which is innovative and offers propositions which the banks may not have otherwise have delivered,” says Dobson. “It puts a bit of fire under our feet”.
Dobson explains regulation of data use is a key part of setting up an open banking proposition, particularly given the recent focus on data use post-GDPR launch.
“A standards body is being set up at the moment. They will ask companies looking to be accredited ‘Are you a responsible entity; do you have a data security track record; how will you protect the data; how will you receive the data and what would you do with it?’” says Dobson.
Dobson says accreditation will be a very straightforward process for large companies like banks, telecommunications and energy providers because they already demonstrate daily they are secure and responsible custodians of customer data.
Another potential benefit of open banking is giving banks reliable data to ensure responsible lending. “By piecing together all the available data, we will get a really reliable financial position and an ability to better diagnose customers may be in hardship and try to help them.”
Learn more about open data and open banking by listening to the podcast above.
Jemma Wight is a production editor at bluenotes