Nov 06, 2021

How Innovo steered 21 Aussie banks towards Open Banking compliance

Sydney start-up Innovo has won a race against time to enable 21 small Australian banks to become compliant with the country’s new Open Banking rules.

The DevOps and digital development specialist was tasked with bringing the institutions in line with regulations of the Australian Competition and Consumer Commission’s (ACCC) Consumer Data Right (CDR) rules before the deadline of 1 November.

Essentially, the rules cover the sharing of product reference data between banks in a standardised format to facilitate better product comparisons, according to the ACCC.

The 21 banks banded together to enlist Innovo after discovering the software platform provided for building out CDR capabilities was lacking a robust testing system to prove regulatory compliance.

For each individual bank to develop their own testing solution, it would be expensive, time-consuming, and potentially add risks.

Having missed the Phase One deadline of 1 July, the 21 banks had just four months to build their own testing software in order to meet the second phase deadline of 1 November.

Speaking to ARN, Innovo director Harold Bult explained that the challenge was to create a “smart solution” that would allow all the banks to test the platform independently, avoiding the time-consuming and manual processes that had hampered the Big Four banks in their initial testing phase last year.

“We used the test cases that the ACCC has put on their website and built them into an automated test solution that gives the banks the ability to run those tests in a relatively short time window,” he said.

In total, more than 90 people, mostly based off-shore, worked on the project, providing coding and development of the scripts.

The software solution is hosted on Amazon Web Services’ (AWS) EC2 and uses AWS Control Tower to manage multiple accounts.

Future operations will utilise additional AWS native services, leveraging both the cloud provider and the capabilities of AWS Premier Consulting partner Blazeclan.

Although the testing task may have seemed easier when completed with the first few banks, the Innovo team soon ran into difficulties when bringing the rest on board.

“In theory, everyone was thinking if it works for the two early adopters, then it will also work for the rest,” Bult said. “But it seemed a bit more complex than that, mostly from a coding perspective.

“We saw that the code is quite stable across the banks but needed to resolve varying configuration. Each bank has slightly different specific customisations in their environment.”

Bank of Victoria was one of the institutions to recently cross over the line and complete a successful test ahead of the November deadline.

Speaking to ARN, Bank of Victoria CIO Scott Wall explained that while the legislation of data sharing will be a “massive cost” to the company, the completion of the testing will enable them to start reaping some of the benefits.

“Now we can receive that data, which will probably be next year,” he said. “Then we can start developing new products and services ourselves.”

“Innovo was an untested partner for us,” he added. “But we signed up with them as they had a very clear-cut project plan, and they’ve certainly delivered. We’re very positive about that relationship and it was very collaborative.”

According to Innovo managing director Nick Finlayson, the testing solution will now be made available on AWS’ Marketplace, with potential for customers from across utilities to telecommunications to leverage it for their own CDR needs.

As of 1 November, all 21 banks have now passed the testing stage and can go live with their CDR capabilities, Finlayson told ARN.

“We shared the knowledge openly and did what was right for open banking and the CDR industry,” he added. “We spent over $1 million to build the solution just in development costs and yet we shared that, and each bank paid less than 10 percent of that to get the product and full compliance. We ensured they all got across the line. It was a true vendor and industry partnership.”


Eleanor Dickinson (ARN)