UNPACKING THE COMPLEXITY OF OPEN BANKING IN AUSTRALIA: COMPETITION AND MONEY LAUNDERING RISKS

Open Banking is designed to give customers more control over their financial data, allowing them to request their bank to securely share product, pricing and transaction data with other banks or authorised Third Party Providers. This will put banks domestically and internationally in competition with a range of new players, from fintech start-ups to technology companies. The exchange of transactional information between banks and big tech companies may have an adverse impact on the efficiency of credit markets when consumers and businesses can borrow from both of them but only banks are required to exchange information about their customers. In addition, implementation of broad data-sharing arrangements, and opening up systems to access by APIs, may also raise questions around anti-money laundering and countering the financing of terrorism (AML/CFT).

The proposed research project will clarify what Open Banking is and what impact Open Banking may have on competition in the short and medium term. The project will aim to address the competition benefits and AML risks that the banking industry will continue to face as technology evolve.