A new report on Open Banking in Australia has found that 62% of financial services firms plan to use Open Banking data within the next 12 months, while consumer education and uptake is seen as the biggest challenge facing financial services firms in achieving their Consumer Data Right (CDR) objectives.
The report, ‘The State of Open Banking 2021’, published by Australian Open Banking provider Frollo, revealed that 76% of fintechs want to start using Open Banking in the next 12 months, compared to 66% of banks and lenders that said they are planning to use CDR data within the next 12 months.
Awareness of Open Banking is higher among banks than lenders, according to the findings, with 89% of banks familiar with Open Banking and 44% of lenders.
In the first 10 months of 2021, 70 banks began sharing consumer data and 14 businesses became Accredited Data Recipients in Australia, up from five data holders and five data recipients in 2020.
Frollo’s latest research showed that the biggest challenges that respondents see to achieving their CDR objectives are consumer education and uptake at 32%, followed by complexity and clarity of the rules (23%) and cost (18%).
Respondents were asked to rate the Federal Government’s consumer education efforts to date, scoring 3.9 out of 10.
But Frollo said that this is likely to improve when more use cases are launched and the Australian Government starts its consumer awareness campaign early next year.
When it comes to use cases, the report revealed that fintechs are most interested in multibank aggregation (68%), personal finance management (PFM) at 64% and customer onboarding (60%).
However, banks and lenders place most value in income and expense verification at 77%, followed by credit scoring algorithms at 62% and PFM, at 57%.
The report’s findings also revealed some uncertainty around the new CDR access models announced by the Treasury earlier this year, which include unrestricted ADR, sponsorship model, representative model, collecting outsourced service providers, trusted adviser and CDR insights.
One in three respondents said they had no idea which of these models they would consider for their business.