New data shows 62% of banks plan to use open banking data within the next 12 months, and 38% within the next six months.
Australian open banking provider Frollo's yearly industry report, shows as data availability has accelerated, optimism for the future of open banking is rising.
According to the survey of 131 financial institutions, 70 banks started sharing consumer data and 14 businesses became Accredited Data Recipients in the first 10 months of 2021.
This is an increase from just fived data Holders and five data recipients in 2020
In October, Treasury announced amendments to its Consumer Data Right (CDR) rules that allowed increased participation in open banking.
These new amendments allow for current CDR participants, accredited by the ACCC, to sponsor other parties to become accredited or allow them to operate as a representative, cutting much of the red tape that surrounded open banking legislation in Australia.
Chief Operating Officer of Australian Finance Group, John Sanger, said eased open banking restrictions could be a game changer.
"We view Open Banking as a transformational enabler for future customer experiences and products that may change the way consumers borrow, save and manage their finances," Mr Sanger said.
New data from Frollo shows the most popular uses for open banking:
- Lending: Income & Expense verification (highly valued by 59% of respondents).
- Money management: Multibank aggregation (50%) and Personal Finance Management (50%)
- Verification: Customer onboarding (49%), Identity verification (38%), account verification (34%) and balance checks (30%)
"Year one of the Consumer Data Right could be considered one big proof of concept, in which the ecosystem proved capable of building and delivering engaging open banking use cases," the report read.
"With many of the regulatory, data and technological building blocks in place, the time is right to start building Open Banking powered consumer experiences. Year two will see access to open banking increasing with many more consumers able to access open banking in many more places."
How fast are the APIs?
API (Application Programming Interface) enables third parties to retrieve information and data from account holders and share with other Accredited Data Recipients.
Frollo's report also analysed the response time from the third quarter of 2021.
What's next for open banking?
Although businesses are keen to start using CDR data, the consensus is that the current scope is limited.
According to Frollo, there’s a lot of interest in potential future additions, such as superannuation (75%) and investment (72%) products.
Most respondents think financial product switching (83%) and Open Banking payments (78%) will be valuable for their business.
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