Open Banking could be the boost Australia’s challenger banks need

Money is pouring into Australia’s fintech sector as regulatory changes and digitally savvy consumers look set to open up the industry.

A new report from Pegasystems, a global software company built on decades of success with large American banks, suggests Open Banking in particular could be a breakout moment for Australia’s growing cohort of neobanks and fintechs.

Open Banking is set to to be fully rolled out in Australia by February next year, mandating that banks share customer data in a machine-readable way. The government and regulators expect the regime will enable easier switching and spur new financial services and competition.

For smaller players like fintechs and Australia’s growing group of neobanks the scheme will enable access to the consumer data they have long coveted.

A Pegasystems whitepaper — Open Banking, How Consumers, Innovators & Incumbents All Benefit — released this week, identifies one market in particular that, through Open Banking, could become a catalyst for wider change: loans.

“Take the question of whether a prospect is a good bet for a loan,” the report reads. “Having access to transactional data across all of a prospect’s financial services, as well as external link assessment, will allow for a more thorough and accurate determination, while also offering the chance to make loan approvals far more automated and seamless.”

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Source: Open Banking could be the boost Australia’s challenger banks need – Which-50