Financial technology (fintech) companies have used customer data screen-scraping practices to obtain their customers’ financial data, with their consent, for many years now. These are the lenders you use, the financial apps that you use for money management, personal finance, and accounting products that are using your information to give the analytics that they use the information to drive it.
As with anything that can obtain your non-public personal information, there is a danger of it getting lost in the mix and your privacy and date ending up “somewhere”. This could be in the wrong hands or just lost in cyberspace until it is happened upon.
Due to this danger, many larger fintech companies are urging the government of Australia to follow the decision of the European Union and ban the usage of customer data screen-scraping. It has not been easy to get a unanimous decision though, smaller fintech companies do not have the resources that the larger ones do, nor can they afford it, which makes screen-scraping their primary data collection system.
The screen-scraping ban has surfaced due to the UK’s Open Banking initiative, which is a more secure way for their consumers, like small businesses, to share information among one another. This is driven by customer consent to allow the shared data to be shared among fintech corporations with more privacy in mind.
The incorporation of the Open Banking initiative has led to less information falling into the hand of a third-party service provider. This means that vital customer information does not have to go through a middleman.
The idea of banning screen-scraping for the smaller fintech corporations that are not affiliated with the bigger banks means that they will have to come up with their own method of obtaining customer information which could cost them millions in AUD.
There are some fintech businesses that follow the rules regardless and even though they could use the screen-scraping applications they don’t. Australia introduced the Privacy Act of 1988 to help regulate how organizations and agencies handle the personal information of their people. They developed 13 Australian Privacy Principles which regulate privacy in credit reporting, tax file numbers, and medical/health research.
Only time will tell if Australia will join the ranks of the UK or if they will develop their own way of protecting the information of customers.