Open Banking under the Consumer Data Right (CDR) is reshaping the Australian financial services landscape. The legislation requires financial institutions to securely share customer data with accredited third-party providers (TPPs), but only when customers opt in. Consumers retain full control and can opt out at any time.
For TPPs, this opens the door to new products, services, and customer insights, driven by access to standardized data through secure APIs. But with that opportunity comes a heightened focus on security, privacy, and compliance.
What Do We Know So Far?
Australia’s Open Banking framework mirrors the United Kingdom’s model introduced under the Payment Services Directive 2 (PSD2) in 2018. It establishes two primary categories of third-party providers:
- Account Information Service Providers (AISPs): Authorized to access account data with consent
- Payment Initiation Service Providers (PISPs): May eventually be allowed to initiate payments, though this capability is not yet permitted in Australia
For now, Open Banking in Australia is limited to AISP functions.
The Australian Competition and Consumer Commission (ACCC) is the lead regulator, supported by the Office of the Australian Information Commissioner (OAIC). CSIRO’s Data61 has been appointed as the Data Standards Body (DSB), tasked with developing the Consumer Data Standards (CDS) across industries, beginning with banking and expanding to energy and telecommunications.
At the heart of the CDS is a clear priority: “APIs are secure.” That principle guides the technical specifications designed to mitigate cyber risks and inadvertent data exposure.
When Does It All Happen?
Open Banking is being introduced in phases. In late 2019, the ACCC announced delays due to security concerns:
- Originally February 2020 → Delayed to July 2020: Credit card, mortgage, deposit, and transaction data
- Originally July 2020 → Delayed to November 2020: Mortgage and personal loan data
While some large institutions may resist the timeline, tech-forward providers have already developed APIs and platforms ready to capitalize on the shift.
TPP Requirements
TPPs must register with the ACCC and demonstrate compliance with the CDS. This includes:
- A Software Statement Assertion (SSA) documenting technical conformance
- Evidence of strong security and privacy practices
- Formal approval through the ACCC’s registration process
These requirements ensure data recipients are prepared to safeguard sensitive consumer information from both technical breaches and organizational oversights.
The Role of SOC 2 and ISO/IEC 27001
SOC 2 and ISO/IEC 27001 are widely recognized frameworks for demonstrating strong security and privacy controls. While not required explicitly, they align well with the expectations of Open Banking regulators.
These frameworks assess and validate key elements such as:
- Security awareness training
- Hiring and onboarding practices
- Defined policies and procedures for data handling
- Organizational commitment to ongoing risk management
Pursuing a SOC 2 report or ISO/IEC 27001 certification signals that your organization takes its security responsibilities seriously and provides third-party assurance that your practices meet industry standards.
Open Banking offers a competitive advantage for TPPs that can demonstrate compliance, transparency, and operational maturity. Whether you’re preparing to register with the ACCC or looking to strengthen your security posture, aligning with trusted frameworks like SOC 2 and ISO/IEC 27001 can accelerate your readiness.
To learn more about how Open Banking requirements may affect your organization—and how to prepare—contact us. We’re here to help you turn compliance into opportunity.
