How open banking data is driving fintech innovation

How open banking data is driving fintech innovation

At the 10th Annual FinTech Summit held in Sydney on Thursday, 12th October 2023, Dr John Harrison from Envestnet | Yodlee hosted a panel discussion with expert guests Simone Jemmett from Experian, Andy Wright from ubank, and Steve Kemp from Intuit.

The panel’s topic was “How data is driving innovation and solving real consumer use cases.”

The conversation centred on open banking, with a particular focus on use cases for individuals and businesses, as well as key success factors and future developments in Australia’s Consumer Data Right (CDR).

Here are the highlights.

What’s a strong open banking use case for an individual consumer?

According to Simone Jemmett, understanding financial health is a strong use case, especially for consumer credit. For consumers to benefit from sharing their data, she said “the data needs to be recognisable, accurate and meaningful.”

Andy Wright commented that, “Consumers want insights in order to meet a financial outcome.” A simple use case like achieving a savings target can be critical to an individual’s life goals and, with the right help from shared banking data, that goal can be fast tracked.

What are the benefits of data sharing for SMBs?

“Good quality data is like good quality oxygen,” said Steve Kemp.

For SMBs, this means having easy access to their up-to-date financial position and also being able to understand cash flow patterns. This can be enabled by data sharing.

He noted that a well-informed small business owner can make the right financial decisions, for example, about when to order additional stock or make a payment.

What are the key success factors when implementing an open data strategy in financial services?

Ms Jemmett commented that a key success factor is operationalising data to improve decision making, rather than just moving data from one resting place to another. Additionally, she noted the growing consumer preference for personalisation and the critical place of trust whenever a consumer consents to data sharing, adding that “confidence is a broader concept than the consent journey.”

For Mr Wright, a key success factor is innovation. He gave examples of the way customer and business data – combined with bank data – is enabling innovation in bank products.

For Mr Kemp, success is all about adoption. “You’ve got to make the adoption easy,” he said citing frictions with joint accounts and business accounts.

What’s exciting in the future of open data?

In moderating the discussion, Dr Harrison noted the momentum in open banking as a result of new CDR access pathways having been introduced, in particular, he mentioned the CDR Representative model and also the Trusted Adviser model.

The panel agreed that data sharing – and the associated analytics and insights that can be generated – are empowering for consumers and businesses as well as the service providers who work with them.

Further, the panel agreed that CDR’s continued expansion from banking into energy and non-bank lending is both exciting and challenging.

“If we get banking right, everything becomes a lot easier,” said Kemp.