Big Brother Banks – who owns your data?


Data is the oil that will lubricate the wheels of the fintech sector. However creating data sets takes time and effort. So many fintechs argue that opening up access to bank data sets is in the interest of the greater public good.

It’s a prickly question and skirts a grey regulatory area in many countries. Just who really owns the data on an individual? The person who creates or the entity who aggregates? And when does the value to the public sector outweigh the competitive right of a private entity, like a bank, to lock it away?

The discussion is front and centre in Australia at the moment, with submissions into the government’s public Productivity Commission inquiry into Data Availability and Use closing on the 29th of July. Like any commission, submissions are extended to academics, government agencies, private entities with large data sets (including finance and social media), and other organisations and community members interested in data access.

Yet despite banks and financial institutions being such significant custodians of financial data, only one financial provider has so far found time to put forward a submission to the inquiry – newly minted banking institution Tyro Payments. In its submission Tyro argues, like many of its fintech peers, that Australia must embrace Open Data and Open APIs. Tyro states it is, ‘in the public interest to mandate that banks give their customers the right and ability to share data held on their behalf with third parties that are under an adequate licensing regime.’

Submission deadlines are a month away. We can only hope the remaining banks aren’t reticent to take part in the national conversation about Open Data. Should we be surprised if they are? Not at all. After all, data is an increasingly valuable commodity and one anyone with a vested interest is trying to protect. But as a natural resource focused economy, Australia knows only too well that some commodities and resources shouldn’t just benefit those that have the ability to mine them.

Overseas the tide is also beginning to turn and precedents are being set that could make it harder for local banks to maintain their data fortresses. In the United Kingdom, government initiatives like Midata are transforming the way individuals make financial decisions, by giving them the ability to access their financial data and plug it into product comparison tools. Midata is a great example of a government led initiative that empowers financial literacy and will drive competition in the most basic of all banking services – transaction accounts. It is a step in the right direction.

An article published in the Australian Financial Review in May cited a recent investment from two of Australia’s largest banks, National Australia Bank and Westpac Banking Group, and Qantas, the national airline carrier, into Data Republic, a data exchange start-up. Both banks made the investment through their VC funds, NAB Ventures and Reinventure Group. Once the infrastructure is in place, customers of each company will be required to consent to have their data exchanged between the providers within the group, via the platform.

But hang on. Does allowing customers of dominant market players to share their data with other dominant market players really stack up? Doesn’t real innovation and competition only come from open access? Not closed systems among entrenched players? I know where I stand on this one. The question is, where will the Australian government?

Of course, Open Data is a double edged sword. Players like Tyro and other fintech startups will need to dance to their own tune when it comes to sharing their data too.  But when competition and innovation are central to a business’s DNA from day one, no doubt this will be seen as an opportunity by fintech startups to keep bettering their own products, rather than as a threat. If actions speak louder than words, it can only be assumed Australian banks see it very much as the latter.

Business.Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business. Disclosure – Jessica Ellerm is an employee of Tyro.


  1. Democratising financial services is a big ask in Australia where the big four have been protected for so long. Their strength gives them a lot of sway in the market and politics so they are going to work very hard to protect this position.

    That is why innovators like Xero have done the hard work for the fintech industry to pull the transactional data and share it via open API, of course after user authorisation. Yodlee has evolved itself into a billion dollar business capitalising on this protectionism and commercialised their bank feeds service globally. You are always going to have to pay for this kind of data as it is so valuable. I’d prefer to pay these innovators opposed to banks if they decided to commercialise their data. Tech innovation and strategic alignments will continue to make this data accessible via these intermediaries.

    The issue of open data should be more focussed on the government and the plethora of invaluable data that is being siloed on dated infrastructure. So much can be done with this non-sensitive public data to drive industry innovation and change.

  2. No or small data approaches may become more popular:
    I don’t know anything about the situation in Australia, but the question certainly is important all over the world. My thoughts: Users entrust their data to banks, other financial institutions, social networks and the like for specific purposes only. No such institution/organization should be allowed to use that data for other purposes than the one originally agreed upon, e.g. banking transactions or communication with friends. even if the contracts legally allow the service providers a much broader use of the data. Service user cannot know in advance in which creative ways their data may be used sometime in the future. There should be no other usage of personal data without the explicit OK from the user/data supplier.
    My “online portfolio” start-up Diversifikator uses a “no” or “small data” approach which means that we want to use and store as little user data as possible. Since users become more sensible regarding the use of their data, I expect that such an approach will become more prominent in the future.

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