Open Banking

The first iteration of Open Banking in Australia – a limited pilot involving the four majors – went live on 1 July 2019.

 

The Consumer Data Right (CDR) legislation was passed by Parliament on 1 August 2019.


Given the inevitability of Open Banking, the question ADI Boards should be asking is not whether to adopt Open Banking, but how to make the most of it. In this context,. Gen Advisory has observed several compelling Open Banking use cases which we believe would be benefit any ADI which elects to adopt them.

At a Glance

Critical Dates

Our Analysis

What Is It
  • Under Open Banking, customers will be given the right to instruct their existing bank to share their data with other banks and accredited FinTechs.

  • Open Banking is aimed at giving customers more choice, control convenience, and confidence

The Future
  • After banking, the CDR will be extended to other sectors such as telecommunications and energy.

  • In Gen Advisory’s view, Open Banking will significantly level the competitive playing field between the majors, non-majors and alternative service providers.

Key Issues
  • API development.

  • Customer-centricity.

  • Value proposition & strategy formulation.

  • Use cases.

  • Cyber-security and resilience. 

  • Privacy policies.

  • Data analytics.

  • Risk-based pricing.

  • Partnerships.

  • Eco-system.

Opportunities
  • Existing ADIs and neo-banks could expand and enhance their native offerings. 

  • Increase appeal to existing and prospective customers. 

  • New value propositions.

  • New revenue streams.

Threats
  • Enables competitors to tap into an ADI's data and then offer competing products/services.

  • Note however that FinTechs are currently already doing this through a process known as screenscraping.

What ADIs need to do to be ready for Open Banking

  • At a minimum, ADIs need to develop a sufficiently robust application programming interface (API) in order to meet their data-sharing obligations under Open Banking. 

  • More importantly, ADI Boards need to assess broader factors such as: customer-retention strategies; product and service offerings; cyber-security and resilience; privacy policies; and data analytics, among others.

How we can help ADIs implement Open Banking

  • Provide strategic advice to ADI Boards on Open Banking requirements, use cases and opportunities vs threats. 

  • Deliver bespoke research on a specific Open Banking-related area of interest.

  • Deliver bespoke training on Open Banking.

  • Manage and execute, on an ADI’s behalf, an end-to- end project on Open Banking.

  • Conduct due diligence on prospective Open Banking solutions providers.

Gen Advisory has in-depth insights into specialised areas.
Contact us about your specific needs.

Contact

Gen Advisory has in-depth insights into specialised areas.
Contact us about your specific needs.

Contact

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