The Open Banking uptake is underway in Australia, though slowly, with businesses focussed on data consent, enrichment and consumer education. That's according to the latest business and consumer insight report from global information services company Experian, developed in partnership with Forrester.
The firms surveyed 103 decision-makers at financial services and telecommunications firms and more than 500 consumers across Australia and New Zealand.
Open Banking uptake in Australia has progressed beyond the early majority phase into the late majority, with one in four local firms already invested in it. Moreover, the uptake is set to progress at an even faster rate in the year ahead as one-quarter of Australian businesses plan to expand or upgrade their adoption of Open Banking in the next 12 months.
Yet some uncertainty remains, with businesses at different stages of their Open Banking journey.
Half of those surveyed already see significant value from Open Banking, while the other half are still trying to determine how to extract the most value from their projects.
Simone Jemmett, General Manager of Experian Digital, says, “While the research suggests that businesses understand the value that Open Banking delivers and the appetite for it remains strong, there are still some teething issues that are preventing it from reaching its full potential.”
“One challenge is the consent process with feedback from industry suggesting it is too cumbersome for consumers. This was also backed by the research, with 2 in 5 businesses worried about consumer consent in Open Banking. One way to overcome this is through a bundled consent model, which allows consumers to consent to multiple uses for their personal data at once, rather than requiring consent for each individual use case.”
“Another challenge is the inconsistency in the data that is shared between lenders. There are currently too many optional data fields which compromises the richness of the insights that can be derived. Models that encourage greater data standardisation are being investigated to overcome this.”
Australian consumers remain cautiously optimistic when it comes to Open Banking.
Currently, one in two Australians (and nearly one in three for 35–44-year-olds) are willing to share personal financial data via a banking app for online applications for financial products. Of those who are unwilling, half could be swayed by institutions that can demonstrate the process is secure.
However, lenders have worked to improve transparency around Open Banking, with one in two Australians agreeing that it is tough to understand how companies use their data.
“The key to winning over consumers is effectively communicating the value exchange, or the extent to which they see benefits from sharing data in the form of improved services or experiences. Consumers need to see more carrots, showing how Open Banking can be harnessed to incentivise behaviours that promote greater financial well-being,” adds Simone.