NextGen's Renee Blethyn on how open banking benefits brokers and consumers
The open banking initiative is gaining momentum in Australia. Having access to richer, more transparent data will change the game for brokers, but it is vital to understand the new regime.
Renee Blethyn, head of broker partnerships at technology firm NextGen, recently spoke with MPA about how open banking impacts the industry and consumers.
“The expectation of consumers to have a lender or a broker who can tap into open banking data is really high and growing rapidly,” Blethyn said. “This is a pivotal moment in the lending industry, and the use of open banking data to enhance the customer experience is going to become the standard moving forward.”
The Australian government launched the Consumer Data Right (CDR) in 2020 with the aim to provide a trusted framework for data sharing. At first, the CDR for open banking was open only to customers of the big four banks and was limited to the sharing of specified data such as deposit and transaction accounts along with credit and debit cards.
Since then, it has been rolled out to non-major authorised deposit-taking institutions and includes Phase 2 and Phase 3 products. That means financial institutions are required to share customer and product data on financial products and services from savings accounts to investment loans and retirement savings.
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This framework allows customers to access and share their financial data with accredited third parties. Consumers have the choice whether to share their data, full visibility of whom it is shared with, and the ability to nominate the time frame in which data will be shared and for what purpose.
Under this regime, brokers and lenders can have access to much richer data.
“The CDR and open banking offers more reliable and up-to-date financial information compared to alternative sources of financial data sharing,” Blethyn said. “...Going forward, these changes give the mortgage broking industry a huge advantage to capitalise on the CDR rules and to utilise open banking data.”
