Open banking is ramping up, so how are lenders using your data?

The era of open banking is upon us, and it's taking off with a vengeance. In this brave, new, data-driven world, how are lenders and fintechs exploiting your shared data? A recent study has revealed some fascinating facts.

One of the country’s most significant financial reforms in recent memory has gone unnoticed in the midst of all that has happened in the last two years.

It’s known as ‘open banking,’ and it attempts to make it easier for you to switch banks when you think you’ve discovered a better bargain on a financial product by allowing you to simply and securely share your banking data with your bank’s rivals.

For example, instead of spending hours compiling evidence (such as bank statements, bills, incomes, and identity documents) to refinancing your house loan, you might just ask your current bank to email the information over for you.

But, as with most things, there’s a cost: you’ll have to disclose your financial information with the prospective lender, fintech, or other expert in order for it to work.

So, how do they make use of your information?

This week, Frollo released the second edition of its annual industry research, The State of Open Banking 2021, which questioned 131 experts from throughout the country’s banking, fintech, technology, and brokerage industries.

According to the research, the availability of open banking data has skyrocketed.

70 banks, including three of the four major banks, began sharing consumer data in the first ten months of 2021, and 14 enterprises, including three of the four major banks, became approved data recipients.

In 2020, there were only five data holders and five data recipients.

More and more financial institutions are preparing to join the party.

Sixty-two percent of respondents plan to use open banking data within the next 12 months, and 38 percent plan to use it within 6 months, according to the industry poll.

So, what are they going to do with the data from the open banking?

The most common applications can be divided into three categories:

– Lending: 59 percent of study respondents place a high priority on income and expense verification.

– Money management: The capacity to handle personal accounts and merge several banks was prized by half of those polled.

The majority of those polled appreciated customer onboarding (49 percent), identification verification (38 percent), account verification (34 percent), and balance checks (30 percent).

Inform yourself about open broking.

It’s important to note that open banking isn’t the only way to make things easier for yourself when it comes to switching financial products.

That’s where we can assist you!

We’re always eager to see whether there’s a chance to get a better rate on a mortgage elsewhere.

And, whether or not we’re using the power of open banking, we take satisfaction in doing the majority of the legwork for you.

So get in contact with us immediately if you’d like to learn more about your possibilities.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au


Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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