As some call for a further delay in passing consumer-friendly legislation (Comprehensive Credit Reporting), requiring banks to make consumer data available to their competitors, FinTech Australia is questioning whether a voluntary promise from the big banks can be trusted. FinTech Australia is calling on the Parliament to pass the legislation without delay and says that relying on the big banks could end in disaster.
Just before the Parliamentary winter recess, in an effort to both repair the reputational damage from the Royal Commission and reduce pressure and urgency to pass the legislation, the Australian Banking Association (on behalf of the Big 4 Banks) announced that the data would be made available on a voluntary basis.
FinTech Australia understands that there may already be some attempts by the big banks to delay or roll back the promise made by the ABA. It is concerned this may have been the plan all along, and that the voluntary promise could be just another tactic to prevent a compulsory regime, something the big banks have opposed for some time. It says that the longer the big banks are allowed to delay reform, the more consumers will be forced to accept the status quo of products and services that don’t meet their needs, bad loans, and even worse the kinds of outcomes heard at the Royal Commission.
FinTech Australia CEO, Brad Kitschke said that trusting the banks to share the data on a voluntary basis puts the banks back in charge, undermines competition, and will end in poor consumer outcomes.
“The legislation has been held up for long enough, and the argument that it can be delayed or put off even further because we can rely on the big 4 banks to provide it on a voluntary basis is foolish given their track record.
The data about a consumer’s financial information is the consumers, not the banks. Allowing the big banks to control or restrict access is not in the interests of consumers.
FinTechs rely on accurate data about a person’s individual financial needs to develop bespoke products and services. Without access to this data, consumers will continue to be forced to accept the off-the-shelf generic products on offer from the big banks that don’t meet their needs. Any further delay or allowing the banks to be in control is only in the interests of the banks.
You only need to read the transcripts of the Royal Commission to know that the strategy of trusting the banks to voluntarily act in the best interests of consumers doesn’t have a great track record of success. Mr Kitschke said.
FinTech Australia says that the delays in passing the legislation, owing to the concerns of consumer advocates about hardship can be overcome. It has established its own Consumer and Small Business Advisory Committee to allow concerns from consumer advocates to be better understood and insists that delaying legislation just hurts consumers.
“Delaying the legislation would just hurt consumers and empower and reward the big banks at a time when we should be doing everything we can to increase competitive pressure and scrutiny. While the concerns of consumer advocates about hardship needed to be worked through a further delay would now hurt consumers and competition.
We need to work together to be fair to consumers and promote competition. However, delaying this legislation hurts both consumers and undermines competition and just rewards the big banks.
With what we know from the Royal Commission, there should be a greater sense of urgency to increase competition, not rely on a voluntary promise from the banks.” Mir Kitschke concluded.
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About FinTech Australia
FinTech Australia Ltd. —is the peak body for the Australian financial services, technology and innovation – Fintech industry. We were founded by Startups, and are a startup ourselves. We work with founders, startups, scaleups and the Fintech ecosystem. We represent our members and advocate for outcomes that facilitate the growth of the Fintech ecosystem with the goal of making Australia a leading Fintech market.