Open Finance: More than half of Australians not comfortable sharing their data to access better deals

Zepto, the Byron Bay-founded real-time and open banking payments innovator, has unveiled the findings of a consumer research study today that reveals potential barriers and enablers to the adoption of Open Finance in Australia. Despite being lauded as ‘the next big thing’ by business, the new study reveals that Australian consumers generally find the concept of Open Data unsettling.

While a fair amount of respondents (24%) find the concept of Open Data appealing, data privacy concerns are proving to be a potential roadblock to its uptake as few consumers (18%) say they are comfortable with the concept of having their personal data shared with third parties, and the majority (54%) are simply not comfortable with it. But the study also provides some directions to tackle these challenges and unlock the potential of Open Data.

In January, The Treasury announced the planned extension of the Customer Data Rights (CDR) to non-bank financial services such as superannuation, insurance or non-bank lending, effectively kicking-off Australia’s journey from Open Banking through Open Finance to Open Data. Consultation processes with the industry will be conducted throughout the year to define the framework for each financial services product.

In parallel, the industry will also need to reflect on optimal ways to present this new regime to Australians. Indeed, consumers are increasingly concerned and aware of companies mishandling their data. Recent data published by the Consumer Policy Research Centre shows that 94% of Australians are uncomfortable with how their personal information is collected and shared online.

Zepto’s research findings showed that many respondents (43%) simply rejected the concept of sharing data with any kind of service providers, and few are willing to share their data, whether it’s their purchase and spending history (18%), transactions (12%), or bank balances (10%). Qualitative interviews showed that a number of them simply do not understand why businesses would need access to their personal data. They perceived little benefit in return for access to their data, and concluded that there was likely more in it for the business seeking access, than for themselves as customers.

They are, however, more open to sharing information related to their energy consumption (48%) and phone and internet usage (42%), and 1 in 5 noted that they would be very likely to allow access to their data if it resulted in a better deal on their energy service.

Finally, they also worried that service providers might start adjusting their offer to customers based on their financial health, for example denying customers extensions, discounts, or even charging them more if they’re financially healthy.

“It is very early days for Open Finance, but alleviating data privacy concerns while convincing consumers of the benefits and fairness of the regime will probably require a long education phase,” said Zepto Head of Customer Experience, James Harvey. “I believe we should start that education sooner rather than later if we want Open Finance to be embraced by consumers.”

“In the qualitative interviews we conducted with consumers, they told us they would be more willing to consider Open Data if they were given control over the process, including being able to pick and choose who has access to their data, and receive guarantees that it wouldn’t be shared or available for purchase by third-parties. I think we will have to hone in on the message that this is not another initiative designed to Hoover-up their personal data and generate profits from it. They are yet to understand that they will have full control over the process, control over who sees their data, which specific data and for how long. And in return for that, they will see clear and substantial benefits in return.

“As to who will take responsibility for this education, this is something that we may want to tackle throughout the consultations. I believe Open Banking’s slow uptake is due to a deficit of trust. Consumers have been burned and badgered by businesses and unscrupulous operators with access to their data. Rebuilding trust around the idea of data sharing will take time, and a lot of work.”