Changing perspectives

An inside look at Open Banking performance and adoption in Australia.

Consumer Data Right

There is a lot of talk about how the Consumer Data Right (CDR) and Open Banking are performing and the majority of commentary is negative. We have found this public perception of Open Banking doesn’t align with our experience or the experience of our customers.

Basiq is one of the few data aggregators that offer both Open Banking and web scraping services. With a substantial user base across various use cases, Basiq can effectively measure the performance of Open Banking against the performance of web scraping. For the first time, we are sharing data from the Basiq platform to provide a different side of the story.

1. Open Banking has a higher growth rate than web scraping

• Compounded monthly growth rate of Open Banking connections – 30%
• Compounded monthly growth rate of web scraping connections – 4%

How?
Data from the Basiq platform shows that Open Banking is increasingly the preferred option for data access, with its growth rate now surpassing that of web scraping. Over an 18-month period, Open Banking connections surged from 10,400 in October 2022 to 777,000 in March 2024, resulting in a compounded monthly growth rate of 30 per cent. In contrast, web scraping connectors grew by only 4 per cent during the same period.

Why?
So, what’s the reason for the observed heightened growth? We attribute it to four key factors:

1. The Government’s introduction of new CDR access models has reduced barriers to access for businesses
2. An increase in the rate of significant data breaches among large corporate organisations
3. Open Banking is a viable option for businesses previously unable to use web scraping
4. Basiq enables customers to trial Open Banking before committing

2. Open Banking has a significantly higher connection success rate

• Open Banking 80% Success rate – Failed connections are a result of invalid usernames/passwords, poor banking consent flow, CDR outages and potential fraudulent activities
• Web Scraping 42% Success rate – The majority of failed connections are a result of invalid usernames/passwords

How?
It’s a common assumption that businesses lose more customers and, therefore, revenue using Open Banking over alternatives like web scraping when connecting customer bank accounts. The logic is that the friction caused by the length of the CDR data connection process results in consumers becoming frustrated and abandoning their attempt to connect their account/s.

Data from the Basiq platform shows the opposite is true. When comparing the success rate of connecting a customer’s bank account, Open Banking has a 80 per cent success rate versus 42 per cent for web scraping.

In essence, our data shows that businesses using Open Banking end up with more customers.

Why?
There are a number of events impacting the higher success rate of Open Banking versus screen scraping on the Basiq platform. These include:

1. Consumer enters an invalid banking username or password
2. Consumers don’t want to share their login or password details with a third-party
3. Bank implements anti-scraping measures
4. Planned maintenance of banking apps and online banking platforms

3. Open Banking is by far the more reliable option for ongoing connections

• Failed connections after a 6 month period – 15% Web Scraping and 0.17% Open Banking

How?
For businesses requiring an ongoing connection to a consumer’s account, such as budgeting or investment apps, data from the Basiq platform shows that Open Banking is highly reliable.

Connection disruption can be a major issue for businesses, increasing the risk of customer churn. Consumers must complete the connection process again to establish a new connection.

Connection data across all customers on the Basiq platform indicates that 15 per cent of all consumers using web scraping will experience a disruption to their connection after six months On the other hand, connection rates using Open Banking remain consistent with less than 0.17 per cent likelihood of disruption.

Why?
Connection issues happen for a number of reasons including:

Web Scraping

1. Consumer login details change
2. Banks changing their UI or API
3. Banks introducing anti-scraping measures

Open Banking

1. Consumer revokes consent
2. Consumer closes the connected account

Important Information: This web copy and white paper has been prepared by Basiq Pty Ltd (ABN 95 616 592 011) (Company), and was originally published on 14 December 2023 on www.basiq.io. Information is current as at the publication date, and the Company has no obligation to update or correct this web copy or white paper. The information contained in this web copy and white paper is of a general nature and is not intended to address the objectives or needs of any particular individual entity, and should not be regarded in any manner as advice. To the extent permitted by law, the Company and its related bodies corporate will not be liable for any errors, omissions, defects or misrepresentations in the information in this web copy and white paper or for any loss or damage suffered by persons who use or rely on such information (including for reasons of negligence, negligent misstatement or otherwise. © 2024 Basiq Pty Ltd.