For many, June 30 is an annual milestone loaded with stress and confusion. Not only are the rules and regulations around tax law continually changing, but many individuals don’t know their financial position until it’s time to lodge their tax return.
For companies, accounting software has made it easy to keep tabs on their tax position. But for individuals, self-managing their taxes has been clunky, time-consuming and clouded in uncertainty.
That’s exactly what TaxTank is on a mission to solve. TaxTank is a low-cost, cloud-based software helping to simplify tax for everyday Australians.
Loaded with smart tax tools and automated bank feeds powered by Open Banking, TaxTank makes it easy to maximise deductions, minimise tax and reduce end-of-financial-year stress for property investors, sole traders and individual taxpayers.
What is TaxTank?
At its core, TaxTank aims to help individuals make informed financial decisions ahead of tax time. The software is cloud-based and low-cost (starting at just $6 per month), packed with features designed to make self-managing income, assets, expenses and overall financial position stress-free.
For founder and Gold Coast-based tax specialist Nicole Kelly, the platform champions a fairer, more transparent tax system for individuals.
Amidst the ever-increasing cost of ATO scrutiny, TaxTank was born from the belief that tax simply cannot be a once-a-year event and be effective. There had to be a better way to improve compliance whilst still making tax simple to manage, easy to understand and hassle-free for everyday Australian taxpayers.
To achieve this, TaxTank empowers customers with the tools they need to plan, manage and simplify their tax affairs in real-time.
Nicole Kelly, Founder of TaxTank says, “working as a CPA and taxation specialist for nearly 10 years, I would see client after client struggling to keep on top of their tax affairs. At tax time it’s a mad rush to consolidate expenses while spending hours searching for receipts to substantiate any deductions for the past year.”
“We wanted to develop a platform that gives the individual taxpayer the ability to not only manage their taxes more effectively but provides a transparent view of their real-time tax and financial position, 365 days a year. This gives the individual and those working with an accountant the opportunity to identify and take advantage of additional tax saving opportunities before the financial year ends,” Nicole added.
TaxTank uses a range of ‘tanks’ or digital containers that store different parts of an individual’s information:
Work Tank manages work-related income using live bank feeds, along with storing receipts for work-related expenses.
Property Tank keeps tabs on an investor’s properties and portfolios to monitor the cash, tax and equity positions.
Sole Tank is designed to help sole traders manage their income, with invoicing and reporting tools, too.
Holdings Tank is designed to manage investors’ stocks, shares and cryptocurrencies, keeping tabs on their portfolio’s value and any gains or losses they’ve made.
Spare Tank is a secure storage area for paperwork, receipts and deduction information.
What sets TaxTank apart is its focus on real-time data, keeping individuals informed about their financial position all year round. Rather than spending hours at tax time collating documents and nervously submitting their return, the platform provides up-to-date tax summaries to save them both time and money and enable better decision-making.
Committed to building a platform that solves the real-world tax problems of everyday Australians, TaxTank surveyed over 33,200 people to find out what features mattered most to them.
Here’s what they’ve delivered:
Real-time reporting with detailed, interactive tax position reports and forecasts.
Live bank feeds that offer real-time tax position summaries.
Secure document storage for receipts, statements and warranties (making a shoebox of faded receipts a thing of the past).
Simple, smart and automated depreciation tools to maximise tax benefits without the hassle.
Smart property value forecasting using CoreLogic’s industry-leading insights (perfect for property investors).
Automate tax position estimates and recommendations for ways to maximise deductions.
The result? TaxTank makes it easy for individuals to claim everything they’re entitled to, while ensuring they’ve got the right records to back up their claims with the ATO. The platform even produces a comprehensive range of tax reports, including the myTax report, allowing users or their accountants to lodge their tax returns with speed and confidence.
Solving tax time stress with smart tax tools
For individuals, lodging their tax returns often comes with fear and uncertainty. Will they receive the sizable refund they were hoping for, or will they be hit with a large, unexpected tax bill?
Plus, the process can take hours out of their week as individuals scramble to gather invoices, receipts and documents from the past 12 months. For many, forking out hundreds (if not thousands) of dollars on an accountant is the only way to get this process sorted.
But with TaxTank’s smart tax tools, individuals can self-manage their tax affairs with confidence. The platform offers travel logbooks, capital gains tax calculators, home office logbooks, depreciation calculators and more to help Australians make informed decisions all year round (not just when lodging their tax return).
Harnessing live bank feeds, powered by Open Banking
TaxTank is pioneering a new way of approaching tax management, the first platform in Australia to tap into bank feeds (powered by Open Banking) gives taxpayers real-time access to their financial position.
While live bank feeds are commonly used for business accounting software, individuals have been forced to tackle the process of gathering receipts and lodging their returns manually.
How TaxTank and Basiq work together
By harnessing Open Banking and Basiq’s Connect and Enrich products, TaxTank harnesses live bank feeds to run its entire platform. This live, standardised and categorised data gives individuals the ability to ensure they’re claiming everything they’re eligible for as a tax deduction (lowering the chance of human error or missing valuable deductions).
Allocating loans and overdrafts to properties also enables a real-time overview of equity, interest rates and accurate growth forecasts over time for informed decisions without the guesswork.
Here’s how it works:
TaxTank requests customer consent to access live bank feeds via Basiq’s Consent UI
Customer accepts or declines permission
If consent is given, Basiq contacts the customer’s bank
Customer bank returns the requested bank data using Basiq’s Connect and Enrich products.
They are ready to roll! Every time a customer logs on their live bank feeds are automatically connected, ready for use on the TaxTank platform – until consent is withdrawn or expires.
It’s never been more important for individuals to have a watertight record-keeping system for tax-related receipts and documents. In fact, changes to tax legislation now mean the ATO is laser-focused on preventing fraudulent activity among investment property owners.
These recent changes mean the ATO is now able to access bank transactions related to these properties to compare them with an individual’s tax declaration).
For individuals, gaining access to live bank feeds through TaxTank is a game-changer, giving them clear oversight of their records and financial position well ahead of tax time.
The future of smarter tax-time decision-making
TaxTank is passionate about leveraging Open Banking to revolutionise the way individuals manage their finances.
To date, individuals have had few options when it comes to proactively preparing for tax time. Large accounting firms have come with high price tags and have been moving away from working with individuals, instead focusing on more lucrative ongoing partnerships with businesses.
Powered by live bank feeds, TaxTank’s software makes accounting and tax support accessible to everyone, from sole traders to individual taxpayers and even property investors.
Individuals can allocate just 10 minutes a week to reviewing transactions and uploading receipts (rather than spending hours scrambling to gather their records at tax time). Plus, there are serious cost savings for taxpayers, in particular investors, who can score upwards of a 60% cost saving by using TaxTank to self-manage throughout the year and engaging TaxTank’s specialist team of virtual accountants to review and lodge painlessly at tax time.
With the ability to review their financials at any time, forecast potential tax scenarios and pinpoint deduction opportunities, individuals are better placed to take control of their finances (which is becoming increasingly important in today’s turbulent economic climate).
Open Banking represents a seismic shift in the fabric of financial services. It allows consumers to have greater control over their financial data, which stimulates competition, allowing smaller institutions, startups and fintechs to leverage financial data in order to compete with incumbent institutions who have dominated the industry for so long.
What is Open Banking?
Open Banking is an innovative and legislated financial services practice which gives consumers the option of sharing their personal information and financial data with accredited third parties, through the use of application programming interfaces (APIs). This creates an unprecedented ‘open’ network of shareable data between financial institutions, who hold consumer data, and service providers, who use the data to create new offerings under the express consent of the consumer.
Why does Open Banking matter? Open Banking will change the way consumers and businesses interact with their finances, and increase the ease and efficiency of data sharing between financial institutions. Open Banking gives consumers more control over their financial data and makes it easier to share their data with companies they trust. This efficient transfer of data will also make it easier for companies to offer new products and services, powered by a technical and regulatory framework to allow consumers to securely share their information in a secure manner. Open Banking is the future of financial services.
What are the main benefits of Open Banking?
Open Banking gives accredited businesses access to valuable data that was previously siloed and held within larger financial institutions. In this sense, Open Banking ‘levels the playing field’ for businesses who wish to create new products and services without the overhead of manually integrating with a number of financial institutions. Consumers will now be able to access and share their banking data with trusted and registered third parties in order to improve their own financial situations, for example, by comparing accounts or accessing new products.
Open Banking is dictated by federal legislation known as the Consumer Data Right (CDR), providing a set of mandated APIs that will provide a stable and reliable connection to customer & financial data, reduce engineering effort, and ultimately improve the customer experience and efficiency of data sharing. These APIs also provide universal data standards across financial institutions, which allows for improved interoperability across financial institutions.
Value for Consumers Open Banking will simplify switching banks and sharing information regarding your account information, transaction history and other financial details. This information can be used to analyse, optimise and enhance your financial situation. This concept also applies to a number of use cases, such as: ease by which you will be able to sign up for new credit or debit card, manage your joint accounts, apply for investment loans, and utilise financial products and budgeting tools which track and plan expenditures – ultimately making your money and general financial wellness a more enjoyable and interactive experience. As the Open Banking ecosystem continues to mature, more and more use cases will arise across a number of different segments.
Benefits for Fintechs, Banks and other Organisations Open Banking is empowering for the financial services industry, creating a number of use cases for those who are using financial data in a novel way. First and foremost, the Open Banking legislation creates competition, challenges the status quo, and levels the playing field of banking, allowing smaller companies and financial institutions equal access to a market which major banks have oligopolised for so long.
With the data sharing pipes laid, it will be much easier to initiate consumer data sharing between data holders (those that have traditionally held financial data such as banks) and data recipient (accredited third parties). Through easier access to financial data, this will encourage competition in the financial services sector, bringing with it a level of innovation that benefits consumers and businesses. It will also enable smaller banks and fintechs to compete with their larger counterparts.
Introduction to the Consumer Data Right
What is the Consumer Data Right? The Consumer Data Right (CDR) is an initiative to drive competition and the development of new financial products and services. It gives consumers greater control over their data and the ability to securely share their data with third parties. CDR dictates a granular, consent-driven set of rules that allows consumers to share their data with accredited third parties in order for them to provide products and services. CDR exists as federal legislation at the Treasury level, while the Australian Competition and Consumer Commission (ACCC) is accountable for accrediting potential data recipients, co-regulating compliance with the Office of the Australian Information Commissioner (OAIC) and providing guidance to stakeholders about their rights and obligations.
CDR is an economy-wide reform that will be rolled out sector by sector. It has been rolled out for the Banking and Energy sectors with Telecommunications to come.
What are the steps to get access? The government has mandated a number of ways to gain access to Open Banking data. There are a number of different models to get access to Open Banking data which brings with it different requirements. The Federal Government has incentivised smaller institutions and fintechs to drive innovation and competition in the market, which has led to the roll out of a number of access models to make Open Banking more accessible.
What are the Open Banking access models available?
Unrestricted ADR – Provides full unrestricted access to receive raw CDR data. Enables organisations to provide CDR services and act as a sponsor or principal.
Sponsored Affiliate The sponsorship model allows organisations to gain access to CDR data by using an unrestricted ADR as a sponsor. This model allows Sponsored Affiliates the same privileges and access to CDR data as an ADR, but at a lower cost and in less time
Principal Representative – This is primarily a business arrangement between an unrestricted ADR and an organisation, however it differs from the Sponsored Affiliate Model as there is no official accreditation required. Under this arrangement, a CDR Representative may only disclose data to their principal (each CDR may have one principal only under this model). This arrangement would also place responsibility (and liability) of the data squarely on the ADR.
Trusted Advisor – This model allows CDR data to be shared with trusted advisors, including financial advisors, mortgage brokers, accountants, tax agents and/or lawyers. Again, no external accreditation would be needed, just targeted access to specific data with the customer’s consent through an unrestricted ADR.
CDR Insights Model – This arrangement also does not require external accreditation, and can be utilised with any organisation who works with an unrestricted ADR. Under the CDR Insights Model, non-accredited parties would receive low-risk insights and data which would benefit their customers in specific ways. This could include verification and management of customer accounts, income, expenses and account balances.
Outsourced Service Provider – While not an access model, an ADR can disclose CDR data to a unaccredited Outsourced Service Provider (OSP) whom they choose to engage. An outsourcing arrangement must exist between the ADR and OSP. These services include the collection of CDR data on behalf of the ADR and the provision of goods or service using the CDR data that the OSP collected on behalf of the ADR.
CDR business consumer – A CDR business consumer is an entity, not an individual, that holds an active ABN. These entities must operate a B2B business and have the authority to consent to sharing their CDR data with various unaccredited third parties, under what is known as “Business Consumer Disclosure Consent.” Eligible third parties include lawyers, accountants, accounting platforms, bookkeepers, consultants, and other advisers.
How Open Banking works
Open Banking provides a secure method by which data can be shared by consumers to accredited third party organisations.
Mechanics of Open Banking Open Banking was designed to promote ability for consumers to be in control of who and how they share their data with accredited third parties. As such, the process is stringent considering the privacy and security concerns related to sensitive data. For consumers to share their data via Open Banking, the following steps will likely occur:
Consent Open Banking cannot exist without the consumers consent. Before anything happens, you must give permission for the provider to access your data, which you can do through the third party’s webpage or application. Equally as important is the concept of “ongoing consent”. The CDR has laid out key principles that must be abided by, and one of these is that consent must be “current”. Consent is only as current as the consumer’s original intent, so if attitudes and behaviours change over time, or are impacted by external events or consumer awareness, consumers can choose to revoke consent at their discretion.
Verify identity Verification of identity is key when dealing with sensitive information. Consumers will be required to identify themselves in order to share data to chosen third parties.
Confirm data sharing These checks and balances may seem tedious at first, but it is for the benefit of consumers. Consumers who use open banking will always be in charge of their data, and will need to provide granular consent whenever it is accessed by third parties. When consumers give access to a third party, the bank will confirm with the consumer the data to be shared, the intended purpose, and for how long, before they do so.
Data is shared and used Once confirmed, the data will be transferred using an API to the third party and it can then be utilised in providing the service to the consumer. Again, this will all be consented to by the consumer, who will always have the option of stopping data sharing, deleting data stored by third parties or changing the process in any way they see fit. Open Banking exists enable consumers to be in control of their data.
CDR’s Open Banking rollout in Australia
Open Banking will foster innovation and competition which benefits businesses and consumers. What made the concept feasible in Australia was the Murray (2014) and Harper (2015) reviews, followed by the Federal Government’s 2017 commission’s inquiry into Data Availability, which later triggered the Farrell report the following year which proposed the establishment of the CDR. This sparked the beginning of the CDR rollout which has matured over the years with an increasing number of participants joining the Open Banking ecosystem.
The Open Banking Timeline:
May 2017 – Government announces CDR commision
May 2018 – Government accepts recommendations and approves the phased implementation of Consumer Data Right. Four major banks are approached to make their data available
July 2019 – Major Banks provide product reference data on Phase 1 products, which include personal basic accounts, GST and Tax accounts, savings accounts and credit and charge cards. Visit the Australian government website for a full list of Phase 1 products
February 2020 – Participating banks provide product reference data on Phase 2 products like home loans, investment property loans and personal loans. Visit the Australian government website for a full list of Phase 2 products
July 2020 – Participating banks provide product reference for Phase 3 products, such as business finances, lines of credit and cash management accounts, as well as account and transaction data
November 2020 – Participating banks provide access to mortgaged personal loans
July 2021 – Other banks must join the participating banks in providing access to data for savings and transaction accounts (Phase 1)
November 2021 – Other banks must join the participating banks in providing access to home and personal loan data (Phase 2)
February 2022 – Other banks must join in providing access to business products, retirement accounts and foreign currency accounts (Phase 3)
July 2022 – Major banks to implement joint accounts changes for primary brands
October 2022 – Major banks’ secondary brands and other banks to implement joint accounts changes
November 2022 – All major banks’ secondary brands and other banks to implement phase 3 products
May 2023 – The Australian Government announces a further $88.8 million over two years from 2023–24 to support the operation of the Consumer Data Right across the banking, energy and non-bank lending sectors. The funding will also help progress design of action initiation and improvements to cyber security
June 2023 – Statutory Review of the Consumer Data Right outlines the Australian Government’s commitment to continue developing the CDR framework – See statement
Visit the CDR website and to learn more about the Rollout.
Which banks use Open Banking? All the major Authorised Deposit Taking Institutions in Australia are required to operate under the Open Banking framework, and many of the smaller and mid-sized banks such as non-bank lenders expected to come on board. See the full list of current data holders and recipients on the Consumer Data Right website.
Current state of Open Banking Over 100 data holder brands are now actively sharing data via Open Banking including Major banks and financial institutions. The Consumer Data Right website provides a view of who the Data Holders and their performance and availability.
How safe is open banking in Australia? Open Banking is a carefully regulated government initiative which can only be used by ADRs registered with the ACCC. When sharing financial data, a consumer is not required to to disclose their login and password details to an ADR (as they log in via the interface of the financial institution), meaning it a very secure method of sharing data using the financial institutions’ security measures. Consumers also have full visibility of who they have consented to sharing their financial data with, for what purpose and for what duration, with the ability to revoke consent and have their data deleted at any time.
What data is shared under CDR Open Banking? Open banking is used to provide insights into your financial data, and to allow ADRs to use your personal information in providing financial services products. This could involve providing services for lending, wealth and investing, personal finance management and many others. In order to do this, they need access to data related to your accounts, balance details and transaction details.
What data guidelines does the CDR prescribe? Stringent Consumer Data Standard (CDS guidelines) have been developed by the Australian Government to ensure that Consumer Data Right legislation gives Australians greater control over their data. These guidelines cover general standards, security profiles, consumer experience, banking, admin and common APIs, schemas, known issues and non-functional requirements.
Each organisation is also bound by the mandated security guidelines, and must have advanced security measures to ensure data can be shared without being compromised. These security protocols prevent security breaches, efficiently deal with breaches in the unlikely case that they occur, automatically review and prevent incidents happening in the future and optimise performance overall.
Open Banking on the global stage
Who are global Open Banking leaders? The Competition and Markets Authority (CMA) initiated open banking in the UK to generate competition and innovation in a market heavily dominated by large financial institutions. A similar concept was formulated under the name Second Payment Services Directive (or PSD2, for short) which Governed the EU. In 2018, and, under their mandate, nine of the largest banks in the UK began to implement open banking and produce open APIs to assist with the process.
Open Banking in Australia does have some key differences compared to its earlier counterparts in the UK and the EU. The core principles of Open Banking are the same between the two regions, however there are differences in approach, mechanisms and scope. For instance licensing is different, with Australia not having an equivalent to the UKs Payment Services Regulations (2017), however the overall requirements in both regions accomplish similar outcomes regarding regulation.
There are also many similarities. Firstly, the reasoning behind Open Banking is the same — to encourage competition in the market. Like Australia, the Open Banking ecosystem and its participants in the UK are strictly registered, and there is a standardised and mandatory way of collecting and sharing data, as well as how banks and third parties connect. Both regions use a central authority to prevent mishandling of data, issue certificates to trusted affiliates and identify each other.
Looking to the future of Open Banking
Open Banking has created new ways for consumers interact with their data, change the way businesses operate and yield economy-wide benefits. The ecosystem has continued to accelerate with more participants leveraging Open banking data to deliver their products and services to market. The new pathways to access Open Banking data announced in February 2022 has encouraged more participation as evidenced by the number of CDR representative arrangements.
To learn more about the future use case for Open Banking read the white paper.
Examples of Open Banking at work
Basiq allows customers all the tools they need to leverage financial data, access account and transaction data in real time, enhance transactions with merchant data, gain deeper insights into customer’s finances and, will eventually be equipped with insight-driven automation.
Open Banking – Frequently Asked Questions
What is Open Banking in Australia? Open Banking is an exciting initiative in Australia, and one which is primed to explode as more and more consumers uptake services with Open Banking-enabled capabilities and more companies realise the benefits for them and their customers.
Is sharing my financial data safe? Yes. In sharing your personal and financial data you are afforded the utmost consumer protections, architected by years of regulatory policy, technical design with privacy at the forefront., This is a highly secure initiative which is just as safe as sharing your personal data with your financial institution. Authorised banks and third parties must adhere to strict accreditation criteria to be eligible, so there is absolutely nothing to worry about. Your data is safe.
It is also important to keep in mind that you are completely in control of what data you share, and can revoke consent to share it at any time. In this case, all personally identifiable data will be deleted.
What banks use Open Banking? All the big banks now provide open banking, with many of the smaller and mid-sized banks quickly following suit. Over 200 Fintechs and banks rely on Basiq’s platform to share data and deliver innovative financial solutions across lending, payments, wealth and digital banking. The potential of Open Banking is generating huge growth and transition in the banking sector, and experts expect a boom in usage in the future.
See the full list of current data holders and recipients at the Consumer Data Right to familiarise yourself with the institutions involved in open data sharing.
What are some Open Banking examples? All of your banking, including changing banks, signing up for new credit cards or applying for loans or mortgages, will eventually ALL be able to be done over the internet through sharing of CDR data.
Sydney, 1 October 2020 – Mandatory product reference data sharing obligations commenced today for non-major authorised deposit-taking institutions (ADIs), covering non-major banks, building societies and credit unions, and the non-primary brands of the major banks.
In compliance with the relevant laws, Rules and Data Standards for the Consumer Data Right (CDR), Cuscal has partnered with a number of clients, including Australian Unity Bank Limited, Bank Australia Limited and Bank of Sydney Ltd, to develop solutions that support compliance with product reference data obligations.
Commenting on clients achieving compliance with the first stage of CDR obligations, Cuscal CCO Bianca Bates said:
Despite the disruption caused by the COVID-19 pandemic, we’ve been able to work closely with our clients to successfully implement solutions supporting the disclosure of product reference data to the market. In some cases services have been implemented within as little as three weeks, ensuring clients have been able to comply with the timelines set by the Australian Competition and Consumer Commission.
We are proud that Australian Unity, Bank Australia and Bank of Sydney chose to partner with Cuscal to deliver this first Open Banking milestone and look forward to supporting them, and our other clients, unlock data to capture new opportunities for growth created by the CDR.
About Cuscal’s Open Banking services
Cuscal’s product reference data APIs form the foundations of a larger economy-wide Collaborative Data Exchange platform that Cuscal is developing in partnership with clients. The Collaborative Data Exchange will provide clients with a modular and flexible service that takes care of CDR compliance obligations and also unlocks greater data enablement opportunities.
Cuscal’s vision is to offer clients a simplified, modular and scalable technology platform that is extensible and interoperable across industries and partners, providing clients the freedom to:
implement their organisational data strategies and ambitions;
unlock legacy data stores to ensure greater flexibility regarding the use of existing data;
combine existing data with external sources, including cross-industry information, to derive valuable customer insights that support the delivery of personalised customer experiences;
build on platform functionality and apply APIs to novel new use cases with minimal capital investment and business disruption; and
innovate and partner with third parties of their choice to offer new data enabled experiences to customers.
