Open banking has transformed the financial sector, empowering customers with greater control over their data and driving innovation among banks. However, in the ANZ market, strict regulations like the Consumer Data Right (CDR) make the transition complex, with even small errors carrying serious financial and reputational risks. Here are five common pitfalls banks face in open banking implementation and how to avoid them. 

5 Common Mistakes With Open Banking Implementation in ANZ Market 

#1 Underestimating Compliance Challenges

Open banking regulations in Australia and New Zealand are stringent, with the CDR mandating strict adherence to privacy, security, and data-sharing rules. However, implementing CDR has proven more costly than anticipated. An independent review commissioned by the Australian Treasury in 2023 revealed that compliance costs for sector participants significantly exceeded original estimates. 

Avoidance Tip: 

Banks need to prioritize compliance early in the process by integrating a robust regulatory strategy. Partnering with experienced consultants or technology providers specializing in CDR compliance can streamline this journey. 

#2 Neglecting API Security

API vulnerabilities pose one of the biggest threats to open banking. According to the Australian Cyber Security Centre (ACSC), financial institutions faced over 11,000 cyber incidents in 2024, many of which targeted APIs. 

Avoidance Tip: 

 Implementing industry best practices, such as OAuth 2.0 and OpenID Connect, and conducting regular penetration testing can bolster API security. Banks should also consider adopting advanced AI-driven monitoring systems to detect and respond to threats in real time. 

#3 Poor Data Quality Management

Data is the backbone of open banking, but many banks struggle with inconsistent or incomplete data sets. In 2023, The Australian Competition and Consumer Commission (ACCC) and the Office of the Australian Information Commissioner (OAIC) have emphasized data quality in the open banking ecosystem as a key focus for compliance and enforcement. This follows the identification of over 280 issues related to data quality within open banking. 

Avoidance Tip: 

Investing in a robust data governance framework is essential. Banks should focus on cleaning and standardizing data before rolling out open banking services. Leveraging tools for real-time data validation and enrichment can further enhance accuracy. 

#4 Lack of Customer-Centric Design

While open banking opens the door to innovation, banks often overlook the end-user experience. In a Deloitte study, 72% of ANZ customers said they were hesitant to share financial data due to poor app design or unclear benefits. 

Avoidance Tip: 

Adopt a customer-centric approach by conducting thorough user research and testing. Focus on delivering clear, user-friendly interfaces that emphasize transparency and benefits. Collaboration with fintech companies can also bring fresh perspectives to customer experience design.

#5 Overlooking Scalability and Future-Proofing

The open banking landscape is rapidly evolving, and solutions that work today may become obsolete tomorrow. In 2024, The Australian government announced a “reset” of the CDR regime to address emerging challenges and opportunities. 

Avoidance Tip: 

To future-proof open banking systems, banks should adopt cloud-native architectures and APIs that are flexible and scalable. Partnering with a technology provider experienced in agile methodologies can also help institutions stay ahead of the curve. 

Choosing the Right Partner for Open Banking Success 

When implementing open banking solutions, selecting the right development partner is a critical decision that can define the success of your initiative. A dependable vendor must possess a deep understanding of regulatory requirements, robust security expertise, and the ability to create scalable, user-friendly systems tailored to your specific needs. 

For banks in the ANZ market, where regulatory frameworks like the Consumer Data Right (CDR) impose strict standards, it’s essential to work with a partner who not only ensures compliance but also drives innovation and operational excellence. A suitable vendor should offer: 

• Compliance Expertise: Proven capabilities in navigating complex regulations to minimize risks. 

• Security Assurance: Advanced tools and strategies to safeguard sensitive financial data. 

• Customer-Centric Design: Intuitive solutions that boost user adoption. 

• Scalable Infrastructure: Future-proof systems that evolve with changing market demands. 

How CMC Global Can Help 

CMC Global is a trusted partner for banks looking to harness the full potential of open banking. With over a decade of experience in digital transformation and financial services, we deliver tailored solutions designed to address the unique challenges of the ANZ market. 

• Compliance Mastery: We align your systems seamlessly with CDR and other regulatory frameworks, ensuring peace of mind. 

• Cutting-Edge Security: Our cybersecurity solutions, including API protection and real-time monitoring, shield sensitive data from threats. 

• Data Excellence: Our advanced data governance tools improve data quality for smooth integration into open banking ecosystems. 

• Customer-Centric Solutions: Our UX/UI experts craft user-friendly platforms that encourage customer adoption. 

• Future-Ready Infrastructure: Using cloud-native technologies, we build scalable and adaptable systems tailored to your growth. 

By partnering with CMC Global, banks in Australia and New Zealand can avoid costly mistakes, meet compliance requirements, and unlock the opportunities that open banking offers. Ready to take the next step? Contact us today to transform your open banking vision into reality.