Open data an opportunity for banks

22-Jun-2017

By Sarah Kendell

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Major financial institutions should not fear increased competition from the federal government’s incoming open data regime, but should look upon it as an opportunity to provide more appropriate and tailored advice to customers, according to Moneytree.

The Japanese data provider yesterday launched its personal finance app in the Australian market, as well as a white paper detailing how data portability was likely to develop in the local financial services market following last month’s budget announcement that the government would introduce an open banking regime next year.

Addressing a media launch in Sydney, Moneytree chief executive Paul Chapman said while there was “a lot of anxiety” among the major banks around the degree to which the government would force them to share customer data, there was also an understanding of the opportunities that could come from partnering with tech-savvy competitors.

“We understand that if [the data regime] doesn’t work for the big banks, they are probably going to try and duck it - we’ve seen the same thing in Europe where some banks are thinking [data reforms are] just being forced upon them,” Chapman said.

“On the upside though, if they don’t open up enough, where is the innovation coming from, where are the new services? The banks need to think about the things that they fundamentally can’t do themselves, but that maybe innovative small companies can help them to do.”

The group’s white paper, “Data portability in Australian financial services: Earning a social licence through standards of security, privacy and transparency”, argued banks could use the new regime as an opportunity to rebuild public trust and improve the quality of advice given to customers.

“While most people trust banks to keep their money safe, many have little trust that banks will provide unbiased advice totally suited to their needs, and unfortunately only a minority believe banks have their best interests at heart,” the paper said.

“[Bringing together data] empowers customers by making it easy to analyse their financial situation, understand how their behaviour, such as spending patterns, is impacting their financial situation, and to change that behaviour to help them save more.”

Chapman said the integration of the group’s data-sharing technology with Salesforce in Japan had enabled local wealth managers to improve the interactivity and responsiveness of their advice.

“For a bank that is using Salesforce’s financial services cloud, the wealth manager can see the ebbs and flows of your portfolio in real time and give you advice based on that, and they can set up notifications so that when things change they can be quick to respond,” he said.

He added the technology was soon to be rolled out to Salesforce’s Australian users.

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