Open banking bringing biggest change in 30 years, says Illion

Registries and credit score firm Illion says the local credit market is experiencing its biggest shake-up in 30 years.

Illion CEO Simon Bligh says open banking will address data asymmetry between banks and smaller fintech players.

Data registries and credit score firm Illion says the local credit market is experiencing its biggest shake-up in 30 years, which will boost consumer choice and improve pricing in many areas of financial services.

Illion’s chief executive Simon Bligh told the Macquarie Technology Summit the nation’s open banking regime was prompting sweeping changes in the financial services market.

“It’s probably the biggest revolution in credit for 30 years,” he said.

“So that new data hits the market, the information asymmetry between the largest banks and the fintechs gets eliminated, more decisions can be made in an automated manner, more cheaply and with better predictive analytics.”

Illion, formerly called Dun & Bradstreet, is involved in both sides of open banking which gives consumers more control over which companies to share their data with when seeking financial products and services.

“Open banking is a very overt process and privacy and trust are hugely important,” Mr Bligh said.

“It means when I as an individual am sharing data it’s clear who I’m sharing it with, why I’m sharing it and for how long I’m sharing it and for what purpose.”

Open banking started in a phased way in July 2020 in Australia with the large banks being required to share data on transaction and deposit accounts, and credit and debit cards ahead of mortgages and other loans being included in November.

Mr Bligh said the changes would benefit consumers and eventually the data right regime would flow into other sectors.

“That’s (open banking) going to give more choice to consumers, and better prices,” he added.

“So this global mega trend where your data is yours to do with as you wish is going to invade several other value chains, telecommunications, and energy are obvious ones.”

Mr Bligh also highlighted the new regime had the potential to drive change in the insurance sector.

“With insurance there’s a historic data moat … claims history is known, my risk is known, the pricing isn’t necessarily clear,” he said.

“If I can pick up my insurance information and I can start to go round to several insurers and see the price that is right for me, then I think that’s going to be quite a dramatic change.”

Private equity firm Archer Capital abandoned a sale process for Illion as Covid-19 started to grip many parts of the world early last year. Macquarie is understood to be a funding partner for Illion.