“Information on bank account transactions, balances, investment decisions, holdings and trades can be very time-consuming for an accountant or fund administrator to transcribe,” Mr Forbes said.

Open banking is a legislated initiative requiring Australia’s banks to allow consumers to share their data with accredited third parties. It is designed to increase competition in the financial services sector, promote innovation, and give consumers more control over their personal and financial data.

Open banking is a specific type of data feed that allows individuals and businesses to give consent to share their banking data with third-party providers, such as fintech companies or other financial institutions through a secure API.

“It aims to create a more competitive and innovative financial services market by promoting greater consumer choice and control over their financial data,” Mr Forbes explained.

There are a number of data feeds available to SMSFs that enable the automatic import and export of data – such as member details, contribution transactions and pension payments – that save time and reduce the risk of manual errors.

“For example, within the SuperConcepts ecosystem, we support over 260 data feed connections that process over a million data elements every week.”

Data feeds supporting SMSFs currently include share prices and financial data feeds, which provide up-to-date information on the performance of various investments such as stocks, bonds, and exchange-traded funds (ETFs).

They also reduce manual data entry with feeds automatically creating bank transactions into accounting software or platforms, look after property valuation, provide estimated market value and rental yield. Finally, compliance data feeds assist with meeting essential regulations and requirements, such as SuperStream, audit and tax reporting obligations.

However, Mr Forbes said open banking has some advantages over the traditional data feed and “provides a precise framework, process and specification for sharing banking data.”

“With open banking, account holders can consent for third-party providers to access their banking data through a secure API but can also easily revoke that consent at any time.

“This means that users and consumers will have greater control over who can access their banking data and for what purposes.”

By contrast, traditional data feed authority forms are often signed and forgotten about months or years later.

“This problem goes away with open banking as users can review who has been given access at any time,” Mr Forbes said.

“Additionally, open banking provides access to more detailed product information and transaction data than traditional bank feeds. With open banking, users can access transaction data going back several years, allowing for a more detailed analysis of their financial history.”

On a practical level, for SMSF software providers like SuperMate, open banking will make it easier to set up data feeds, and the total number of domestic bank feeds supported will quickly expand towards complete coverage.

Administrators and advisers should be aware that there will be changes to the consent process and ongoing consent responsibilities of the bank account holders.

SuperMate software users will need to elect a trusted adviser for their site, such as a registered tax agent.

“Trustees can relax until closer to implementation. However, they will need access to online banking to see and approve sharing their fund’s banking data with the elected open banking trusted adviser,” he said.

“While there are several challenges to overcome, the benefits of greater transparency, flexibility, and choice are significant.

“By preparing for open banking now, SMSF trustees, accountants, and advisers can stay ahead of the curve. Whether you’re a seasoned SMSF professional or just starting, it’s worth investing the time and resources to understand open banking and how it can benefit you and your clients. By doing so, you’ll secure yourself a position in this rapidly evolving area of financial services.”