Frollo hails Open Banking ‘acceleration’ in Australia amid CDR ‘pause’

Ellie Duncan
17 Oct 2023

Open Banking in Australia has had “an opportunity to accelerate” as the rollout of the Consumer Data Right (CDR) is paused, but underlying consent issues remain to be fixed, according to Frollo.

In its latest State of Open Banking report, the Open Banking provider revealed that the number of businesses registered to use Open Banking data has nearly doubled in Australia over the past 12 months, from 77 to 142.

Earlier this year, the Australian Government temporarily suspended the rollout of CDR to the superannuation, insurance and telcoms sectors, having already implemented Open Banking in the banking and energy sectors.

Tony Thrassis, chief executive officer of Frollo, said: “Some talk about the pause in the CDR rollout as giving Open Banking time to mature, but what it really does is give it an opportunity to accelerate.”

Banks and Open Banking providers make up almost half of the Accredited Data Recipients in the country, with 10 apiece, followed by payments and lending businesses.

Three of the four major banks have launched Open Banking use cases, with Commonwealth Bank of Australia the most recent to do so.

In April, BCU Bank launched a personal financial “empowerment” app in partnership with Frollo, which links a customer’s accounts across all financial institutions in one place using Open Banking technology.

Frollo revealed that more than two-thirds of the registered entities use the ‘CDR Representative’ model to access Open Banking data, and many of these are fintechs which, collectively, launched 34 different use cases.

Frollo’s chief commercial officer Simon Docherty said: “All banks have had to make significant investments to comply with Data Holder obligations, and for smaller banks, this has tapped both their resources and their finances.

“Once banks have access to the quality of data available, there are many exciting ways they can use that data to improve systems, processes and customer interactions.”

In its latest report, Frollo identified data quality and consent conversions as the main issues that still require addressing, before the rollout of CDR continues.

Consent conversion collected in the Frollo consumer app between January and August 2023, once analysed, found that 27% of consent attempts fail on the Data Holder side, after the Data Recipient has collected the consent.

According to Frollo’s research, half of users who did not successfully link their accounts because they were unable to log into their bank and retrieve their one-time code.

“Larger banks most likely have the budget and resources to launch Open Banking use cases and start getting returns on this investment,” added Docherty.

“When larger banks actively lead the charge, it helps other bank CEOs and boards prioritise CDR-driven projects, knowing they need to remain competitive.”