In the submission, the ABA said data should be transferred for free only when the client is transferring that data for a “direct use case”.
“For example, if a customer consents for their transaction data to be transferred to a third party for the direct use case of comparing a new loan product and limits the transferee’s right to use that data for that purpose only, then no charge should be levied on either the third party or the customer,” the submission said.
“Furthermore, for data that is transferred for free, the ABA considers that to avoid unnecessary burden on industry there should be clear service levels on how that data is made available. Compelling data holders to make data available without charge and on demand will create substantial cost when most use cases do not require that level of availability.”
The submission argued that allowing the transfer of data for unrestricted use could allow the recipient of the data to “gain value for that data beyond the use that directly benefits the customer”.
“For example, the transferee may be able to derive significant value through segmentation and aggregation insights, which it can then recoup through selling those insights,” the submission said.
“This is beyond the objective of open data and the ABA believes that further consideration should be given for an economic model in the case of data transfer for unrestricted use cases.”
The submission also cautioned the proposed 12 month implementation timeline would not be sufficient to appropriately establish an open data regime, and added that a ‘phased introduction’ of the regime, which will see deposit product data included in the first 12 months and other products “rolled out in subsequent stages with timelines set based on the experience of the first wave.”
Last week neo-bank Xinja issued a submission to the same review, arguing that an open data regime would make financial advice more accessible for consumers.
Monetizing the customer data can make millions for the banks and 3rd party value providers – primarily the AISP roles. Hence there needs to be responsible governing of the data access, and customers should have controls to instantly cut-off any access.
Additionally, why not let customers make money from their own data rather than being charged! After all, if they don’t opt-in, none of this will create any value…