Open Banking is just around the corner – it’s time to get ready!
Australia is lagging the rest of the world when it comes to open banking legislation and capability, but the fact that we have an implementation date in just 6 months’ time will take most Aussies by total surprise. Having only recently just come to terms with comprehensive credit reporting changes, as well as tightened lending scrutiny, the initial reaction to new legislation forcing banks to share customer data is uncertainty, and in some cases, horror.
From February 2020, the Big 4 Banks will have to provide all Debit & Credit Card, Savings & Transaction, as well as Mortgage Data to consumers on demand via “APIs”. This means that if a consumer is using a technology solution that can “pull” customer data directly from a bank, the bank must provide the data. Other banks need to follow by July 2020.
The benefits of open banking are huge for consumers. We will have complete control over our own banking and other financial data, and the reality of being able to view and project our own financial position across a range of providers is soon to be a reality. And we will have the control to be able to choose to share it with whomever we choose. Imagine going to see a new trusted financial adviser and being able to discuss in the first meeting exactly where everything is at, and then simply pushing all of the pieces of relevant data to them rather than completing laborious application forms and compiling dozens of documents. When it comes to a loan application, it will literally shave dozens of hours off the application process and days off the assessment process, because we can push trusted, accurate data to a lender in seconds.
But it is transparency at its highest level. It offers speed, accuracy and certainty, but at an initially uncomfortable cost – our privacy, and potentially pride. The short term danger is that before we have come to terms with the full benefits of this new brighter, frictionless world, the legal availability of this data may create an expectation that this data be provided on demand. It’s not hard to imagine a lender refusing a loan without being provided this electronic data.
For more tips & advice, contact Lanie Conquest at Surf Coast Finance
With over 25 years’ banking & financial services experience, she helps local families & businesses make smart financing decisions.
M: 0418 938 646