Treasury mulling an end to ‘screen scraping’ in favour of open banking

afr.com:

Treasury is considering banning “screen scraping” of financial data from bank accounts, a move that could force data sharing across the financial services sector into the alternative open banking regime.

The major banks have spent more than $1 billion building open banking for the federal government, according to sources, as the first industry adoption of the “consumer data right”, a major competition policy. However, volumes of data passing through CDR remain miniscule, raising questions about whether it will become a white elephant.

Uptake has been slow because screen scraping – which involves sharing banking passwords with third parties who then access bank accounts and collect data that supports the provision of products and services – is cheap and easy. It also provides the same, or even better quality banking data than the CDR is delivering.

Data from screen scraping, also known as digital data capture, is widely used by fintechs and banks to price risk, validate income, or provide insights on customer spending or behaviour. It is also used by energy providers and non-bank lenders.

But Commonwealth Bank for many years has argued that the technique carries security risks given it involves the sharing of account credentials: something open banking eliminates.

In the European Union and the United Kingdom, governments have banned screen scraping, forcing data into their equivalent open banking regimes.

An independent statutory review of the CDR by Elizabeth Kelly in September called for screen scraping to “be banned in the near future in sectors where the CDR is a viable alternative”.

Treasury has now asked market participants to provide, by late October, “views on a ban on screen scraping where the CDR is a viable