Regulation stifling financial tech innovation in Australia

Rebecca Merrett (CIO)

“Australian customers must be offered the same protection and security by new players that they receive from traditional banks," CBA said.

“This is especially critical as many businesses increasingly use advanced data analytics on large data sets (‘big data’) to deliver more tailored services and products.

"The use of big data to provide insight into a customer’s preferences must be carefully balanced with a customer’s right to privacy and existing obligations businesses face in the handling and treatment of such data."

The bank said this lack of regulatory consistency increases the risk to customers and to the stability of the financial system.

Another issue CBA identified was customers often having multiple online identities, increasing the risk of fraud.

“These burdens can inhibit the digital economy from fulfilling its potential – as much as two-thirds of value generation is at risk if there is not a trusted flow of data.

“Offering individuals the opportunity to use a trusted digital identity to access a range of online services will enhance their online experience and improve trust, security, privacy and productivity,” CBA said in its submission.

Macquarie Group suggested regulation should accommodate the FIDO (Fast Identity Online) Alliance that is developing specifications that define open, scalable, interoperable security mechanisms for online user authentication.

CBA also pointed out that Australia’s national cyber security strategy has not been updated since 2009.

The bank recommended the strategy be updated, and the government promote greater public-private partnering on real-time sharing of information and intelligence, formalise roles, responsibilities and protocols in the event of a cyber-crisis.

It also wants the government to explore incentives for private sector investment in cyber security, and advocate internationally for Internet policy and governance settings that will enable growth of the digital economy.

Source: CIO Australia

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