The regime will start with product data from Monday and extend to customer data by 1 February next year.
"Open banking will break down the barriers consumers have faced in finding and switching to banks which offer them the best deals," Luke Bunbury said in a statement.
"This means the incumbent banks will have to innovate to compete, as there will be a long line of fintechs and neobanks like Volt wanting to harness this data to offer customers a superior banking experience.
Bunbury said innovative banks would be able to help Australians find and secure better deals on a range of banking and even non-banking services, like utilities and travel.
"By enabling data to be shareable across financial institutions, it would be also possible for customers to manage multiple bank accounts from one mobile app, regardless of whether the accounts are held with rival banks," he added.
"There is work to be done on educating and convincing consumers of the benefits of open banking, and reassuring them that the security and privacy of their data will not be compromised."
The chief executive of payments innovation platform Verrency, David Link, said from February 2020, Australian bank customers would be able to ask for their financial data to be shared with approved third parties.
"This is a tremendous opportunity for consumers to achieve better financial outcomes and very importantly, an incredible opportunity for banks to innovate," he said.
"By being enabled to receive customer data from third-party institutions, banks will be able to deliver a more personalised consumer offering as well as different value-added services, and become a more trusted banking partner to their customers.
The effective use of data and access to new value-added services will slowly become a major decision-driver for consumers when it comes to choosing or changing who ‘owns their relationship’."
Link warned that banks which did not take this seriously would start to slowly struggle to remain competitive. "On the other hand, those which take steps to become more agile – especially in their ability to deliver value around the consumer relationship -- are going to thrive in the post-open banking landscape."
He said it would be interesting to watch how global consumer platforms like Facebook, Apple, Google, Amazon, PayPal and Samsung, who were already a factor in the local payments landscape through their digital wallets, adapted in an open banking environment.
"Open banking will ultimately allow these consumer platforms to better integrate their ecosystem of services into the rest of their banking experience, such as loans and mortgages, giving them a new advantage over the local banks," Link said.
"The potential outcome of this is that the large consumer platforms own the consumer relationship and that banks who don’t move equally as fast to meet the changing desires of their customers then become commoditised and lose a substantial proportion of their revenue. The banks that will win in the long run – big or small, established player or neobank – will be those that deliver services and products of value to their customers. And the battlefront for those customers will be around the moment of payment."
Santosh Devaraj, the chief executive of cyber security firm Secure Logic, said consumer confidence and trust in security systems were essential to the uptake of a technology or platform.
"Understandably, there is concern among the public about what this means for the security and privacy of their banking data, and government and industry are going to need to take consumers on an educational journey about how their data will remain secure," he said.
"This will be particularly important as the government legislates the Consumer Data Right in the coming months, and the prospect of increased data flow around multiple sectors of the economy becomes a reality.
"The only companies which will initially be approved to receive this data are authorised deposit-taking institutions and other financial institutions which are already subject to highly stringent legislation about their security infrastructure, so there is a high degree of assurance. This needs to be communicated to Australians so they aren’t scared of their data, and take control of it to improve their lives."
Bede Hackney, the ANZ country manager for cyber exposure firm Tenable, said: "Open banking presents an enormous opportunity for banks to create ecosystems of value for customers. The Australian Competition and Consumer Commission should be commended for how they’ve approached the Consumer Data Right by collaborating with the banks and their FinTech partners, as well as consulting an industry body like CSIRO Data61.
"For customers to embrace open banking, they must be confident that robust security mechanisms are in place and that their data and privacy are being protected. However, with the incumbents locked in a race to meet the February 2020 deadline and innovate faster than agile fintechs and competitors, and vice versa, speed-to-market pressures could undermine security.
"It's no secret that banks have become an attractive target for bad actors looking to monetise their efforts. And the growing number of IoT devices, public cloud services and ephemeral applications is rapidly expanding the attack surface. To allay concerns and ensure the security of consumer data, all stakeholders must continue to be united in prioritising security throughout the implementation process and up until the February 2020 rollout."
Nick Caley, vice-president, Financial Services & Regulation at identity and access management software company ForgeRock, said the big four banks would make account and product data available through secure application programming interfaces from 1 July.
This would give customers "greater freedom and control in how they interact with their financial service provider. The next few months will either make or break open banking which has the potential to transform Australia's banking ecosystem", he said.
"At the core of open banking is the concept of consumer trust and consent. For banks, making user consent a central part of their strategy has never been more important. By putting consumers in control of how and under what circumstances their information is shared, implementing dynamic consent and taking transparency seriously, organisations will be able to grow consumer trust and build positive and long-term relationships.
"This will, in turn, allow them to offer additional services, based on personalisation, explore new revenue streams and add to their customer base."