Open banking remains closed for most

The UP app at the cafe Garson. Tracey Nearmy/Daily Telegraph

On July 1, 2020 Australia’s big four banks finally pushed the button and let free their customers’ transactional banking data (as had been mandated through the government’s Consumer Data Right rules). We’re now a month in and the long-promised and much-anticipated arrival of Open Banking has been somewhat disappointing.

Only two organisations have so far been accredited as data recipients: a company promising to employ Open Banking to provide a single view of your finances (unfortunately at the time of writing their app is still asking for banking login details) and a regional bank who are using the technology to fast-track personal loan applications.

While the arrival of Open Banking itself is an important step forward, it’s not entirely clear at this point that Open Banking will really liberate our data in the way we might have hoped. Mostly, efforts seem focused on making it easier for banks and other financial institutions to do business with customers.

And especially “good” customers – the ones who spend the “right” amount of money on the “right” types of goods and services. Want a good rate on your next car loan? Then avoid regular trips to your fast-food vendor of choice. And give the TAB a miss outside Melbourne Cup week.

The core tenet of Open Banking was that customers should have the right to access and control their own financial data. But are we at risk of heading down a road where our data controls us instead?

This week Up (Australia’s first digital bank) released its own take on a banking API. Similar to Open Banking in spirit but very different in execution, it gives customers a way to directly and securely access their banking data without needing to go through any intermediaries.

Within minutes of the announcement, Up customers were sharing working code and examples of how they were able to quickly develop small apps that could connect to Up and access their balances and transactions.

In just a few days since launching, hundreds of Upsiders have connected to the Up API to access their data and explore new ideas.

One customer built software to send their Up transactions to a budgeting spreadsheet the instant they happen. Another developed a humorous way to view their savings progress.

Respecting Australian‘s data rights is about more than giving them a faster way to borrow money or save a few bucks on their insurance — it’s about giving them the freedom to access (or build!) the best tools in the market to make sense of their finances. Australians’ understanding of where their money goes should not be at the mercy of the corporation that receives their pay check.

We‘re hopeful Open Banking will soon find its feet. But in the meantime, Up has successfully demonstrated how open access to banking data can help customers to gain more control over their finances. If, as an industry, we get this right, 2020 could very well mark the beginning of a new age of financial enlightenment.

Anson Parker is head of product at Up, Australia’s first digital bank.