Stryd

Australia’s Consumer Data Right (CDR) has a clear vision of giving the consumer more control over their banking data, to achieve greater choice, convenience and confidence in their selection of financial products and services.

These purposes are well-articulated and put the regime’s focus squarely on the consumer, as is appropriate, because it is the consumer’s data that is shared, and therefore it is the consumer who should benefit.

Since going live in July 2020, two open banking use cases have burned bright:

1) personal financial management, and

2) consumer lending, including home loans.

The home loans space is where Stryd operates, with our open banking enabled products for mortgage brokers and lenders.

Our Stryd product repository consumes the open banking Product Reference Data APIs made available by 85+ Australian banks and we update it daily.

(To discover more, access our 50-page deep dive white paper on it! Download a copy here)

Moving forward, to unlock Scott Farrell’s big vision, we feel that industry collaboration will be the key to achieving open banking Utopia.

Senior leaders came together to participate in a collaborative panel discussion

At our in-person event in Sydney (on Tuesday, 28 May 2024), we had a stellar line-up of talent that engaged thoughtfully with Australia’s open banking journey so far, what’s working well, what needs tweaking, and what is still a work-in-progress.

The panel discussion was moderated by Annie Kane, Editor of The Adviser Magazine, and featured Stryd Founder & CEO Ruth Hatherley alongside Mike Page from MOGOPLUS, Lance Goodman from Compare Club, and Sam McCready from AFG.

In her opening remarks, Ruth Hatherley underscored the power of collaboration:

“For us, collaboration in this space is critical in order to provide the capability of choice, control and convenience for consumers,” Ruth said.

Ruth specifically cited collaboration between technologists, data scientists, compliance professionals and product managers.

What would open banking Utopia look like?

According to Ruth, open banking Utopia would enable consumers to make product choices by any origination channel they choose.

“We – lenders, technology providers and the actual originating channels for consumers – have to stop being ‘frenemies’ in this space,” Ruth said.

Mike Page, from credit insights provider MOGOPLUS, said CDR Utopia would be consumers providing an enduring consent for a service provider to access their bank transactions and then receive “nudges” based on their income and spending patterns.

“If an enterprise I trust has my data and can give me nudges, give me help and advice once they’ve seen something in my data – whether it be my superannuation or wealth provider noting I’ve changed job, or bought a home and then reach out to ask if that has changed my insurance or investment strategy – I think that would be a real game changer for me,” Mike explained.

Sam McCready, from aggregation group AFG, suggested optimising the algorithms that analyse bank statement data – particularly when it comes to the classification of expenses – was a priority for both consumers and brokers. He noted that one-off transactions can be tricky for the algorithms.

Sam also advocated for a central location where a consumer could grant consent for their chosen providers to access their open banking data (whether a broker, lender, financial management app or similar), rather than there being multiple access points.

Mike Page agreed, suggesting there could be an issue of consumer “consent fatigue.”

He added: “Let’s fast forward another 12–18 months, we’re going to have banks, utilities, service providers and soon non-bank lenders with all these different consents for consumers… it will be lost in a sea of consent.”

Lance Goodman, from comparison platform Compare Club, outlined that Utopia would be for open banking “to help people manage their bills” and enable trusted advisers to help consumers save money on multiple products – such as insurance or home loans – on an ongoing basis.

“If we can help people across multiple products – not only in one point in time but over a period of time – and we can see if their situation changes, that’s a key thing,” he said.

Lance added: “Purely from a lending perspective, having data categorised correctly could get a much quicker turnaround and potentially moving to a bidding system where each lender can assess the data individually and provide an offer almost in real time.”

How do we move closer to open banking Utopia?

Mike Page said he believes there needs to be much greater consumer awareness of the value of open banking to ensure it is not avoided for the wrong reasons.

“People don’t wake up in the morning and say ‘I must use my Consumer Data Right this morning. But they do wake up and say: ‘I want a new car, or a house or I need to get out of the hardship situation I’m in’. So there’s got to be an end result, there’s got to be value and there’s got to be a use case at the end of it,” Mike said.

Lance Goodman agreed, suggesting that the government should pay for a consumer awareness campaign to educate consumers on the benefits of open banking/using their Consumer Data Right, with Mike Page adding that businesses also had a responsibility to “facilitate and fuel the open banking ecosystem to actually showcase value and use cases for consumers”.

In her closing remarks, Ruth Hatherley concluded: “I think everyone’s got a responsibility – everyone who holds the products – to improve the consumer education piece … but I think the government does have a responsibility to increase exposure.”

She said that the challenge of unlocking more value for consumers via the CDR starts with the sharing of raw data, then it requires garnering insights and enabling actions.

For example, in the case of our flagship Stryd broker product, it’s identifying that a borrower in a broker’s trail book is eligible for a better interest rate with a different lender, and then digitally supporting a series of valuable interactions with that customer.