Some of the top banks in Australia are very keen to gain access the tax date of their customers and are making their views on the matter public. Commonwealth Bank of Australia (CBA) is one of the four banks that has reached out to the Australian Tax Office (ATO) regarding this.
Their main explanation for this request is that they would have a better idea of a client’s income so that they can offer them the best possible loans. It would be a one-time sharing of data and this was revealed in a recent government inquiry into financial technology.
The bank has some pretty good reasons for asking for access to this data. For one, it would greatly reduce loan processing times.
Banks would be able to reasonably calculate whether a person can pay off the loan they are applying for. Plus, it would protect banks from loan fraudsters. Many customers try to overestimate their income so that they can have better loans. They will then have a hard time paying off the loan. The bank is the loser in that situation since they lose out on payments.
The process that CBA suggests for the info sharing is pretty simple. The bank itself will not have access to the entire tax data. It will only be able to get the data after it goes through an encrypted intermediary. The bank will then only have access to the data that it needs. All of this is contingent on the approval of users. Telling customers that they can have their loan approved faster if they allowed access to tax data is a great way to encourage it though. Though customers should be wary of the news as in 2018 the bank lost the personal financial histories of over 19.80 million customers.
The release of tax data would come under an expansion of Consumer Data Rights (CDR). This would allow consumers to have a greater ability on how their data is shared and used by the various companies in their lives.
CBA is not the only bank that is pushing for an expansion to CDR. Macquarie Bank is also requesting for giving people more power over their data, with tax data in particular. This is not the first time that the bank has pushed for tax data access. In 2019, Macquarie representatives pointing out how useful ATO data is for banking and customers should have the right to share it.
That is not the only sort of data that banks want access to. Some banks want to have a look at their customer’s outgoing expenses to better estimate their spending power. Sharing data is more important than ever and banks are aiming to get a peek at people’s info for their benefit.