Open Banking is coming (and it’s something to feel good about)

Words by Gareth Gumbley, Founder & CEO, Frollo

In the lead-up to the launch of Open Banking in Australia later this year, there’s been a spate of warnings in recent months about protecting your accounts from unauthorised access.

Behind it all are changes to Consumer Data Rights (CDR) legislation that are designed to shift the balance in favour of consumers by giving you greater access to your banking data and control over who you share that information with. 

In short, it’s about transparency and it’s long overdue. The Government agrees – and that’s why these changes are underway. 

I founded Frollo because I wanted people to feel good about money. Not just some people, but everybody. Now I get messages from Frollo users every day telling me how they no longer stress about money. They have literally turned their finances around and this has positively impacted their lives. The starting point was being able to see the full picture and how to improve their finances in just a few simple steps.

That’s where transparency around your financial data comes in. But it pays to understand who has access to your data, how it is being used and what you are consenting to. 

Sharing your information safely

At Frollo we know that the first step toward getting ahead financially is being able to see the big picture. 

That’s why we aggregate all of your financial data into one place so that you have a single view of your finances – regardless of which bank (or multiple banks) you are with.  

The technology we use that allows data displayed on the screen of one application to be made available for another application (sometimes referred to as ‘screen scraping’). Although it sounds nasty, it is completely legal and secure – as long as the customer has consented to sharing their data and the company that it is being shared with is ‘legit’. ASIC and ACCC reiterated that again this week, saying they were not aware of any harm caused by the practice and it should not be stopped.

At Frollo we protect the information that you share with us, whether through our website or our app, using the same security standards used by all the big Australian banks (such as international information standards (ISO 27001) and banking standards (APRA CPS234). With your consent we use that information to help you instantly see your finances, get the full picture, smart savings and a clear path to having more in your pocket.

It’s the same technology that has been used within the financial sector for many years – by financial management apps, accounting products even banks themselves. It was the first step towards Open Banking and the Australian Government’s plans to increase competition in the banking sector and make the playing field fairer for consumers.

An even better way with Open Banking 

After passing changes to  Australian Competition and Consumer Commission (ACCC) legislation and creating the CDR Rules, Open Banking (OB) is due to kick off in July 2020 with the big banks first to share data. This will offer an alternative to screen scraping by allowing customers to send their data to third parties via a scheme regulated by the ACCC. 

We and others in the industry have lobbied Government to bring changes that will:

  • make pricing of financial products more transparent;
  • enable customers to compare price data based on their own spending and transactions;
  • choose the best products for their personal or business circumstances; 
  • make it easier to switch from one provider to another;
  • increase security and remove the need to share your password with a third party; and 
  • provide faster and more reliable data exchanges enabling innovation to improve your experience with your money. .

In short, this means you can be in better control of your own financial data, choose where – and with whom – you securely share that information, and get access to better deals. 

Frollo is leading the charge 

This new business environment offers huge potential for financial services organisations, like banks and Frollo, to improve the consumer experience.  

Frollo is one of only nine Fintechs selected to be part of testing the new Open Banking ecosystem, regulated by the ACCC and Federal Treasury as part of the incoming changes to CDR legislations. We’ve invested in becoming an Accredited Data Recipient of Open Banking because we believe that all Australians should have access to better banking services, be able to take control of their finances and switch banks if and when the time is right. It’s our reason for getting out of bed in the morning! 

Protecting your data   

Cybersecurity is still a major issue for financial institutions and consumers alike. That’s why banks and other financial institutions are taking measures now to protect their customers from online fraud – and you should too. Here’s how you can take better care of your data and account security: 

  1. Keep your password and security information safe. Frollo recommends using a password manager (e.g. LastPass or 1Password) to create a unique password for every account you hold
  2. Only share your information with legitimate companies, like Frollo, that have strict security measures and privacy policies in place. Read more about how we protect your information here
  3. Be careful who you share your BSB and account numbers with. Frollo suggests only sharing with people you trust such as your partner, family members or friends. Us a secure platform, like PayID, to share details wherever possible.
  4. Make sure you know how organisations are using your data, for how long and for what purposes as the organisation you’re sharing your data with often isn’t the only one getting unfettered access, without you even knowing. It pays to check, and if it’s not clear on their website, to ask them.

We’re excited about the future. Open Banking will kick off with the big banks from 1 July 2020 and although it will be some years before all banks and financial institutions support Open Banking fully, we’re leading the charge. With Frollo we’ll not only keep your information secure, but also show you how to get ahead now.

If you wish to be one of the first in Australia to use Open Banking, sign up to our waitlist here.

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