How is Australia’s Open Banking Regime Changing the Financial Landscape?

Australia has and continues to be an extremely friendly environment for foreign companies looking to expand in the country. In fact, a 2019 World Bank Survey places Australia as one of the friendliest countries in the world to do business. Currently, Australia’s new open banking regime only adds to the attractiveness of the country.

Australia’s legal frameworks, regulations and institutions provide a friendly environment for foreign investment particularly for access to credit and monetary borrowing. Australia excels in its legal rights index and has a profound respect for good corporate and business practices. Furthermore, Australia’s judicial processes rank very high in comparison with other nations that may appeal to foreign investors. Likewise, the bureaucracy involved in starting a business is considerably low permitting fast incorporation procedures.

Learn why the new Australia’s open banking regime is an important addition to an investor friendly environment.

Australia’s new open banking regime

Since July 2020, the Australian Consumer Data Right Act is in force bringing to life the new open bank regime. However, note that the new regime will be rolled out in stages. In the first stage, consumers can freely share their banking details or data with registered providers regarding deposit and transactional accounts. Consumers can also share their credit and debit card data in this stage.

In the second stage starting November 2020, consumers can share data regarding investments, personal loans and joint accounts, only to name a few. The “big four” in the country (ANZ, NAB, Westpac, and the Commonwealth Bank) will implement new procedures in compliance with this new act.

Official Australian entities such as the Competition and Consumer Commission (ACCC), will regulate the said implementation procedures and handle all accreditation processes helping Fintechs or other companies who wish to leverage this new regime.

New regime benefits Fintechs

The new open banking regime is expected to alter the status quo and dominance exerted in the sector by the aforementioned “big four”. Furthermore, customers will be able to freely share their data with Fintechs, thus bypassing the “big four”. This could potentially cause an avalanche of new deals and opportunities for new businesses looking to capitalize on the Fintech sector. 

In summary, this new regime acts as a catalyst for Fintechs in the country with an opportunity for a huge client base. It will also open the door for fruitful collaborations and partnerships between the banks and the Fintech startups, both local and foreign.

Whilst true that Australia’s financial sector is improving for the better, it is also undeniable that clients will need to ace their game in terms of knowledge and usage of the new and improving digital channels, platforms and overall services. This is a fact both local banks and fintech entrepreneurs. That is why efforts are constantly made to not just drive innovation forward, but also to educate and inform local clients and companies.

Take advantage of Australia’s new open banking regime with the help of Biz Latin Hub

Although Australia is a very favourable business destination, there may arise some difficulties when doing business abroad due to legal and cultural hoops. At Biz Latin Hub, our team of multilingual experts can help you comply with tax and company formation requirements.

With our full suite of bilingual market entry and back-office services, we are your single point of contact in Latin America, able to provide solutions tailored to your specific needs. Contact us to find out how we can help you with your business.

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