What’s changed since Hayne royal commission?

Fintech Australia boss Rebecca Shot-Guppy. Source: Supplied.

It’s been a year since the Hayne Royal Commission, and recently I found myself wondering what has actually changed?
The fintech sector is still growing at a furious pace. The financial services industry has a new code. Executives and Boards have been turned over in the wake of the commission. New ones have replaced them. Meanwhile, banks have doubled down on traditional banking and move away from insurance products and wealth offerings.

But I’d argue the average consumer feels like there’s been little change to the way their bank operates, despite the change in messaging.

This underscores what everyone in the fintech industry has known for a while: In today’s market, innovation is the best driver of competition and reform.

More importantly, innovation in financial services has the ability to drive economic growth and cultural change that creates more jobs and produces better outcomes for consumers.

As a result, many who have been following the introduction of the Consumer Data Right would be looking forward to the June introduction of Open Banking in Australia.

Because, after endless discussion of how the sector needs to change, this reform might finally start turning the wheel in the right direction and begin the journey towards a fully digital economy.

But after it launches, I think it’s impact may fall a little flat.

Don’t get me wrong, this reform has been worth fighting for and will lead to further competition. But what you may not know is that after two years of debate and delays, only half of the full functionality of this reform will hit the market.

There are two types of innovation with Open Banking. They are called ‘read’ and ‘write’ access.

Read access means other companies – with your permission – can see your financial data.

Write access, however, allows these companies to instruct for a payment to be initiated.

By June, select fintechs will have ‘read’ access to banking data. With this, they may be able to offer you recommendations based on your spending habits and, suggest alternate products that provide the same value for less money.

It will also become easier to switch bank account, as you’re new bank will be able to add in all of your past spending data, payment arrangements, and contacts.

But the real innovation will happen when fintechs are allowed ‘write’ access.

We’ve seen some incredible executions of ‘write’ access in the UK. A company called Bean has created a platform that allows its customers to compare their bills to find a better deal and cancel their subscriptions through one platform.

Another fintech called Plum connects to your bank accounts, and using AI, monitors your spending habits and then automatically deposits money it believes you can save into a savings account.
This is the kind of transformational innovation Australians are expecting from fintech and the broader financial services sector.

The good news is that we’re set to get it sooner than later.

The government has already started the process for implementing ‘write’ access, well ahead of the rollout of ‘read’ access later this year. We expect that this is the first stage of range of measures that will be looked at by the review including how do we manage digital ID in the digital economy and ultimately who manages data and what consent looks like.

With a fully rolled out Open Banking, Open Data regime, the fintech industry will satisfy that demand from the Australian public for a refresh in financial services. The kind that may be expected the Royal Commission to bring about.

Everyone now has the opportunity to debate the policy and its place in Australia. I personally think that the introduction of write access can’t come soon enough.

Once Australians get a taste for when Open Banking can do for them, I think many will agree that it will be the first step in creating a better, truly digital economy.

Rebecca Schot-Guppy is the GM of FinTech Australia.