Open banking is here and it’s charging full steam ahead. How are lenders and fintech’s using your shared data in this brave, new, data-fueled world?
With everything that has gone on over the past two years, one of the nation’s biggest banking overhauls in recent memory has slipped under the radar. It is called ‘open banking’ and it aims to allow you to share your banking data easily and securely with your bank’s competitors to make it more convenient for you to switch banks when you think you have found a better deal on a financial product.
For example, instead of spending hours and hours gathering documentation (such as bank statements, expenses, earnings, and identification documents) to refinance your home loan, you could simply request that your current bank sends the information across for you. But, like most things, it comes with a trade-off – you have got to share your banking data with the prospective lender, fintech or allied professional to make it happen.
How Do They Use Your Data?
Australian open banking provider Frollo has published the second edition of The State of Open Banking 2021, which surveyed 131 professionals representing banks and lenders, fintech’s, technology providers and brokers across the country. The report shows open banking data availability has accelerated dramatically.
In the first 10 months of 2021, 70 banks started sharing consumer data and 14 businesses became accredited data recipients, including three of the four big banks. This is an increase from just five data holders and five data recipients in 2020. And more financial institutions are getting ready to jump on board.
The industry survey shows 62% of respondents plan to use open banking data within the next 12 months, and 38% within the next 6 months.
What Are They Using the Open Banking Data For?
Well, the most popular uses can be grouped into three categories:
1. Lending: income and expense verification is highly valued by 59% of survey respondents.
2. Money management: multi-bank aggregation and personal finance management were highly valued by 50% of respondents.
3. Verification: customer onboard (49%), identity verification (38%), account verification (34%) and balance checks (30%) were all highly valued.
For Open Broking, Get in Touch
It is important to note that open banking is not the only way you can make life easier on yourself when it comes to switching up financial products. That’s what we are here for!
We are an open book and always happy to check whether you can apply for a better deal on your home loan somewhere else. And as you know, we pride ourselves on taking on most of the legwork, whether we are harnessing the power of open banking or not. So, if you would like to explore your options, get in touch with us today and we would love to help you out!
Phone: 1300 855 022
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.