Open Banking: Slowing down to speed up?

Open Banking: Slowing down to speed up?

Australia’s leading Open Banking provider Frollo has published the fourth edition of its State of Open Banking report. The latest edition shows an ecosystem that is more realistic and less hyped, less distracted by what’s next and more focused on delivering value for consumers today.

Frollo CEO Tony Thrassis 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.”

Unlocking real world value

The number of businesses registered to use Open Banking data has grown significantly in the past 12 months, almost doubling from 77 to 142. And this growth is visible across the board.

The Banks

Banks (10) and Open Banking providers (10) make up almost half of the ADRs, followed by payments and lending businesses. Three of the four major banks have launched Open Banking use cases, with CBA as the most recent addition. And mutuals like Beyond Bank and P&N Group have been leading the way, using Open Banking to provide their customers with financial well-being tools.

Although the banks have been slow to get out of the gates, more and more are launching Proof of Concepts.

Reflecting on the use of Open Banking in the banking sector, Frollo CCO 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.”

But he’s optimistic about the activity he sees in the banking sector today: “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,” Docherty added.


Fintechs were expected to drive much of the innovation in the Consumer Data Right. And that is coming to fruition. Over two-thirds of the registered entities (101) use the CDR Representative model to access Open Banking data, many of them fintechs. They collectively launched 34 different use cases.

Now that fintechs are coming to the table, it’s time for the government to provide its support through a government awareness campaign.

Trusted Advisers

The Trusted Adviser model has been another growth driver, making it easier for financial advisers, mortgage brokers and accountants to access Open Banking data to service their clients. Innovators like AMP Advice, Finsure and Sherlok have embraced this model to bring Open Banking powered services to their network.

The low barrier to entry through the TA model, security, and better data make Open Banking an exciting alternative for mortgage brokers. Renee Blethyn, Head of Broker Partnerships at NextGen, said, “Brokers have told us they are saving time, gaining better insights faster, and that their clients prefer the streamlined, less time-consuming and secure process.”

The roll-out: Done but not dusted

As the government slows down CDR’s push into other industries, the focus is on making Open Banking more effective and fixing issues with data quality and consents.

That’s a welcome change, as even though Open Banking APIs have been fast and reliable for a few years now, there are still issues to fix. The most important one being consent conversion.

An analysis of consent conversion collected in the Frollo consumer app between January and August 2023 found that 27% of consent attempts fail on the Data Holder side, after the Data Recipient has collected the consent. Survey data shows that for almost half of the users who didn’t successfully link their accounts, it was because they couldn’t log in to their bank and retrieve their One Time code.

Australians want Open Banking, even if they don’t know it by name

A survey of over 1,000 people suggests that although the majority (55%) of Australians have not heard of Open Banking, there is an appetite for Open Banking powered features.

The key insights:

  1. All of their finances in one app
    On average, Australians hold financial products with 2.5 different institutions, and getting a holistic view of their finances in a single app ranked in the top 3 digital banking features for almost half (44%) of consumers. And even more (44%) would consider switching to a different bank if it offered this feature.
  2. Better deals and personalised offers
    Australians want their bank to help them get a better deal on their finances with products and services that are better suited to them.
  3. Young customers will switch for Open Banking
    Younger generations are most excited about Open Banking powered features and are most likely to switch to get access.
  4. An easier mortgage application process
    Despite limited awareness, Open Banking emerges as the preferred method of sharing financial information in the mortgage process.

What’s next for Open Banking?

Lending is expected to be another driver of Open Banking, especially in the short term when businesses seek use cases with a clear ROI. Simon Docherty says it’s “The biggest opportunity at the moment… hands down.”

“Not only does Open Banking deliver customer benefits in Lending, but there’s a clear and measurable return on investment for businesses using Open Banking data through time saved in processing and better decisions from quality data,” Docherty said.

While many market challengers are driving innovation and providing proof points, Docherty says the bigger players can really push Open Banking forward.

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

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

“It’s also clear that larger banks’ active use of CDR provides the scale to drive crucial customer adoption and awareness and that customer adoption will lift the entire ecosystem.”

About the report

The State of Open Banking 2024 is a report by Open Banking provider Frollo. This year’s theme is ‘Slowing down to speed up’: As the government focuses on fixing underlying issues, industry takeup is starting to materialise.

Experts featured in the report are:

Foreword – Link

Interview #1 – Link

  • Stuart Low, Founder and CEO of Biza

Interview #2 – Link

  • Renee Blethyn, Head of Broker Partnerships at NextGen

What’s the hold-up – Link

  • Lindsay O’Sullivan, Chief Operating Officer at Keystart Loans
  • Simon Burt, Head of Digital Experience and Innovation at NGM Group
  • Simon Docherty, CCO of Frollo
  • Rehan D’almeida, General Manager at Fintech Australia

Case studies featured in the report are: