As part of the Australian Government’s upcoming ‘Consumer Data Right’, people will soon be able to use their own banking data to instantly see what banking products on the market are best for them.
Consumer Data Right will give people, who choose to share their data, the right to access it in a way that can easily be processed by a computer.
This data can then be analysed by third-party algorithms which will match bank accounts, credit cards, mortgages and insurance products from any bank or financial institution on the market to that customer - helping them to make more informed banking decisions.
This service will be available thanks to third parties being able to “plug in” to a bank’s network, analyse the shared data and, if a customer requests it, match financial products from anywhere on the market to their individual needs.
Customers will be able to see the options, tailored specifically to them, via the third party’s website or app.
What is Open Banking?
With Open Baking, customers can choose to securely share their account transactions, mortgage data and credit card information between banks and with third-party financial providers.
Once shared, their data can be analysed by other banks and third parties to offer products tailored to their individual needs based on their actual financial information.
What does it mean for the future of banking?
By sharing data, customers will be able to easily compare products and solutions from a range of banks at a glance of their laptop or phone - easily seeing what else is available based on their needs and lifestyle.
Banks will also be able to use individual information to make better decisions on what they offer customers, tailoring services more specifically to individuals and ensuring their needs are met.
Further, customers will be able to shop around for the best investments and ultimately manage their budgets better. They’ll also be able to easily switch banks, which will require banks to create greater value, increasing competition for customers.
How does it affect young Australians now and in the future?
By sharing and having data analysed, customers can choose between banking products that are tailored to them - from anywhere, at any time.
Insights into their own banking data can also help customers better manage their spending, saving and budgeting to help them achieve their financial goals. Banks can also use these insights to advise customers on which products will help them achieve these goals.
Is there anything young people should do to prepare?
Young people should think about their short and long-term goals, do some research and figure out how much money they’ll need to achieve them. It’s a good idea for them to shop around and see what help is out there from banks and how they can help to improve and protect customer financial wellbeing, so they can achieve the things they want to in life, whether it be study, travel, buying a car or starting a business.
With swiping and tapping making money easy to spend, young people no longer see physical cash being used, making it harder for them to understand its true value – reinforcing the need for money lessons starting at a young age (even if they can’t see the physical dollars and cents).
To find out more about the impact of new and disruptive technology and the banking industry, check out our FLIP: FinTech & Gamification: Changing the face of banking
Thank you to our partner Suncorp for providing the information in this article.