Boosting Australia’s open finance to spur innovationAugust 3, 2021 | By Richard Wormald
We live in a hyper-connected world. The adoption of new technologies and creation of new data-driven digital experiences have been accelerated during COVID-19. With the emergence of open finance including open banking, the way consumers and businesses can connect with and control their data, for everything from budgeting and payments to investing and borrowing, is being reimagined and redefined.
At its core, open banking tech is software that lets you give organisations permission to access some of your data in real time, so that they can immediately respond and provide you with a better service experience. It’s like the privacy permissions on your phone that allow an app to use your camera or storage. And as with app permissions, you’re in control of how your information is shared, what it is specifically used for, and when to switch it on or off.
For example, if you’re requesting a loan, you can give permission to allow your chosen lender to see some of your banking data, for example regular expenses or payslips, that may boost your chances of a successful application.
As the expectations of people and businesses continue to expand, we’re excited to bring our best-in-class open banking solutions to Australia in early 2022. With Mastercard’s open banking solutions, mortgage providers will be able to assess your application much more quickly, and your buy now pay later provider can consider all your finances wherever they are held. If a small business wants to get a loan, it doesn’t matter that they don’t have physical documentation for the lender – they can provide their finances in any format for consideration.
In Australia, the first phase of Consumer Data Right, which facilitates open banking, went live in July 2020. The phased rollout is designed to ease the transition, for banks, telecommunication providers and utility companies to offer open banking services to consumers in 2022.
Financial services innovators that can capitalise on this rapid digital transformation will thrive in this new ‘open finance’ economy.
Platform for Innovation
Our open banking solution will blend the best of our innovative spirit and ingenuity while also leveraging the expertise of Finicity open finance as we build the technology and connectivity.
What you can expect to see from us first is a focus on use cases in lending and financial management, quickly followed by others, creating an interconnected network that empowers consumers and small- to-medium sized businesses to use their own data for their benefit, while providing a platform for financial services innovation.
The global expansion of open banking promises to catalyse innovation across the financial services industry, helping consumers and businesses make choices about services that best meet their needs, without the need to only stay with the provider where their data has always been. Next-gen services will utilise seamless access to a better and broader set of data, fundamentally changing our relationship with money.
Data as a Force for Good
The expansion of open banking into Australia is enabling consumers and small-to-medium sized businesses to direct how and where they share their data. Our commitment is to ensure this happens easily and securely so you can realise and benefit from new financial outcomes. That starts with an unrelenting commitment to our central data principles.
We remain focused on ensuring that consumers and businesses own their data, they control it and they should benefit from the use of it. We’re focused on protecting it. This is the backbone of our open banking approach.
As the Consumer Data Right in Australia expands, and consumers and small businesses become more aware of how their data can be used within the rules of the Consumer Data Right, they should provide consent only to companies that prioritise their experience, treat their data with respect and use it for intended purposes.
Today, we play a central role in this by providing secure connectivity between financial institutions, fintechs, and others through our global open banking/open finance network, ensuring the highest levels of trust and transparency in every interaction.
We continue to invest in advancing the solutions –that provide reliable access, secure transmission, and management of customer-consented data to improve the customer experience, enabling providers to make decisions in minutes, rather than days.
Open banking will be a great equaliser and will increase competition, innovation, and customer centricity across banking and fintech. Those who champion open banking today and focus on developing differentiated propositions and capabilities will emerge as the innovative leaders of tomorrow.
We’re committed to being there alongside our customers and partners to ensure what’s done in this space delivers that end value to the consumer. You see, it’s not just about innovation. If done right, open banking has the potential to create more financial opportunity for everyone.