Interestingly, an ecosystem built on the security needs of banks for sharing consumer data will see fintechs become more intrinsically linked to the innovation opportunities open banking allows for.
The progression of the
Australian finance sector in recent times has been centred on putting power back into consumers hands. The Banking Royal Commission, established in late 2017, highlighted a need for better practices regarding sharing consumer jamaica telemarketing database data and putting those customers first under structured guidelines around security and liability over their data.
Open banking is a rapidly-emerging industry practice describing financial organisations sharing their banking data with accredited third parties to help with broad use cases such as improving lending decisions, tracking spending behaviours and comparing products and services.
This has coincided with the dramatic
rise of fintechs – particularly neobanks. The latter are attracting huge amounts of investment and consumer adoption and happen to be particularly strong users of open banking technology.
Australia is home to some of the world’s most promising neobanks, with Up and 86 400 becoming household names and quickly winning users. As of last year, 10,000 people had accounts with 86 400, and Up had more than 100,000 customers on its books. This year, 86 400 secured $34 million in funding.
Tonia Berglund
Other progressive finance markets have seen similar adoption. According to 2020 research by Finder, 23% of British adults have opened an account with a digital-only bank, equating to 12 million people.
By comparison, only 9% had a digital-only account in 2019, meaning there’s been a 165% year-over-year increase.
The same is generally true of open banking adoption
The UK’s Open Banking Implementation Entity reported that usage of open banking has doubled in the past six months, reaching 2m users.
Furthermore, PwC predicts that by 2022, 71% of UK SMBs and almost two third of adults will have adopted open banking, creating a £7.2 billion revenue opportunity for the ecosystem.