“The data we can now get is of such superior quality that not many fields are missing, it’s easy for us to start using and extracting insights right away.
Envestnet Yodlee became an accredited outsourced service provider last year, meaning it can manage and receive data feeds from Australian banks and super funds, as well as those in the US and Great Britain. Britain which have similar open banking programs.
WeMoney became an Accredited Data Recipient in February, which also enables it to process and receive data streams from banking institutions through its approved secure technical systems.
Personal debt levels
The Perth-based start-up has already discovered a slew of new personalized financial management tools it can deploy to customers using the new data feeds, particularly around the cost of personal and car loans.
“We already knew that non-mortgage debt between ages 18 and 40 was huge,” Jovevski said, adding that it was about $28,000 per person.
“But with all this new data, we can see that people are paying between 5 and 10% on old personal loans.”
As such, WeMoney has already adapted its product roadmap to take advantage of new insights into customer behavior.
Digital Economy Minister Jane Hume has consulted with industry on how best to roll out the new data-sharing regime.
“This is an exciting development and demonstrates the importance of rule changes introduced last year to increase CDR participation and direct consumer benefits,” Ms. Hume said of the partnership.
“New CDR-powered apps that support financial wellbeing will help build Australia’s financial literacy.”
Experts initially criticized the government’s open banking accreditation process, arguing that it was too expensive and complex for undercapitalized start-ups to use.
However, the Treasury has since suggested a model in which an accredited sponsor could help with the regulatory burden – a change that intermediaries such as Envestnet Yodlee are taking advantage of.
The US-based company carves out a niche for itself in the value chain where it manages complex accreditation processes and can distribute huge datasets in a format fledgling startups can receive and practically use.
Despite a slow start, Australia’s open banking sector is gaining momentum among fintechs.
Same-day lending startups are eager to leverage rich customer data to improve their approval algorithms, and crypto startups aim to plug blockchain-based lending protocols into the mainstream.
Even though fintechs are the most obvious beneficiaries of secure, free-flowing customer data, the Treasury is extending “consumer data rights” from banking, energy and telecommunications to other sectors such as lending non-banking, insurance, pension and payment data.
The Treasury calls this decision “open finance”. WeMoney’s Mr. Jovevski said consumers would ultimately benefit from CDR’s expansion.