Like it or not, open data is becoming a new reality for Australian bankers and investors. The fintechs are pushing for it, the Australian Government is reviewing it, and investment giant Macquarie Bank is trialling it.
All the while, the Royal Commission continues to ripple through the financial services sector, with conduct and compliance also at the forefront of discourse. Inevitably, the commission outcomes will pose significant and timely repercussions amid a shifting industry that is becoming increasingly customer-centric.
Just last month, Investment bank Deloitte issued their Australian Mortgage Report, highlighting a number of insights from some of the industry’s biggest thought leaders. Themed the ‘customer in control’, the report showcased data and commentary derived from a roundtable of department heads and c-level from institutions such as ING, Westpac, Bank of Queensland (BOQ), and HSBC.
The rise of ‘open data’ and ‘open banking’ and the subsequent implications for consumers was a hot topic; namely, whether consumers would leverage it to their advantage or resist the new transparency-focussed era.
The roundtable consensus on this varied, with Deloitte’s Heather Baister optimistic about consumer capability, “logically you have to think generationally. Boomers and Gen X have been brought up to protect their data. To keep everything tight and only share your data with those you have to. However, the next generation coming through, the Ys and the Millennials, see their data far more as their asset to bargain with.”
Senior cabinet member and treasurer Scott Morrison, who was responsible for handing down the 2018 Australian federal budget, supports open data’s emergence into Australia’s market, stating, “Power needs to be put back in the hands of the customer.”
My Expert director Brett Wadelton, largely agrees, “open data can be a positive or a negative thing. If you’re good with your money and pay things on time, given the rise of automation, this should work in your favour.”
“If you’re late on a repayment, or overdraw your account even marginally, the new reporting system will detect and disclose that. That said, open data will likely encourage more communication in general, alleviating commonly faced ambiguity from credit applicants.”
In the Australian Mortgage Report, Deloitte Partner Paul Wiebusch, reinforced the idea that open data can be leveraged for the greater good, “open banking will give back control to customers over their financial data and allow them to share it with third parties.”
Wiebusch believes comprehensive credit reporting (CCR) as well as ‘positive credit reporting’ is just the beginning for data sharing, adding, “it requires organisations to report on customer’s positive credit behaviours, instead of only defaults and missed payments.”
With that in mind, “access to such open data will not of itself be enough for organisations”, Wiebusch notes. In other words, organisations will need the programming, infrastructure, governance, and willingness to properly harness the benefits of accessible data.
All in all, My Expert director, Brett Wadelton, concludes that this serves as one component of a much needed industry shift, “for us, it’s awesome, we’ll have deeper relationships with clients. It’s an educational process and it will become the norm.”
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Disclaimer: This content is generic in nature and not to be used as independent financial advice; readers should seek independent legal advice in the instance they feel they require it.