A major fintech has released a report that suggests that more than 50% of people don’t know what Open Banking is.
The study, which spoke to 2,000 consumers around the world, was commissioned by fintech Mambu, who have been active in Australia since 2019 and offer cloud-based banking solutions to the finance industry.
The headline news from the report is that 52% of people do not know what Open Banking is, and that 61% have never used it.
"You don't need to sell open banking, you need to sell the benefits," said Kristofer Rogers, General Manager ANZ for Mambu. "Think about other technologies that you don't expect a consumer to understand: CRM, ERP, all the things businesses use to manage customers: the customers don't care, they just care about getting a better service."
"Open Banking is designed to improve loan origination, so for a broker, if technology can help them speed up a decision-making process and rely less on traditional paperwork, they should be sold on the ideology of what Open Banking is. It's nothing new, but it's becoming faster, and that is the consumer expectation at the core."
According to Rogers, the Australian banking industry is disconnected from the world of Open Banking.
“There's two disconnects,” he told Australian Broker. “We're not seeing Open Banking in market, there's not enough products that are powered by Open Banking at this time. We're selling this utopia without seeing the benefits in the market. There's currently only 12 accredited data recipients, so there are very few providers to brokers that can deliver these products unless ACCC can get faster in processing fintechs. That's a big disconnect. The more people launching more products to help brokers in market, the better the understanding and acceptance of Open Banking will be.”
“The other disconnect is the fact that Open Banking is built on APIs and Next-Gen tech: Australian banks are definitely not. There's a struggle to make core technologies meet the rollout of Open Banking. Many banks have applied successfully already for an extension in delivering Open Banking around the regulation. There's your second big disconnect, in technologies.
