Switching banks with one click can reshape financial services

Australia’s “open banking” era begins in about a month, with the first application of the government’s flagship “consumer data right” (CDR) to give citizens control of their data.

Treasury is already thinking about how the regime will be extended, and the addition of a powerful feature that will have a big impact on competition in the market and the creation of a digital economy that Australia can take to the world.

In short, the initial version of the CDR on July 1, is a “read-only” system, meaning customers can tell their bank to send their data to an accredited third party – such as a fintech company – to look at and analyse (and offer to provide a better offer.)

The change that is going to make this truly industry-disrupting will be the shifting of the “read-only” permission to a “write” one, thereby unleashing the power for instant change.

Adding “write access” means the recipient of the data will be able to do a lot more for the customer. With the appropriate authority, for example, the recipient could make a payment, open an account or close an existing one.

The possibilities are frightening for banks, which could have customers disappearing with a few clicks, and energising for disruptors, which have long been frustrated by the laborious process of winning clients off incumbents.

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Source: Switching banks with one click can reshape financial services