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Tag: Open Banking

The Start of a New Era in Lending: How Open Banking is Changing the Game

Posted on by Cuscal Limited
how-open-banking-is-changing-the-game-for-lenders

As a lender, you want to do everything you can to fast-track approval times, boost conversion rates and deliver a seamless customer experience. 

But if you’re relying on web connectors (often referred to as ‘screen scraping’) alone to access customers’ financial data, you’re leaving your business vulnerable to disruptions that could encourage customers to abandon their loan application and take their business elsewhere.

Increasingly, Open Banking is becoming the preferred option for innovative lenders looking to stand out in a competitive market. In fact, lending is one of the most popular use cases for Open Banking.

With improved speed, connectivity, security and greater customer control, Open Banking benefits both the lender and their customers by enabling faster, more informed lending decisions that will help boost conversation rates.

The risks of accessing financial data via screen scraping 

Imagine losing the ability to connect to customer financial data that sits with the major banks for a lending assessment. Whether you’ve encountered issues with transaction data to date or not, the consensus is clear: screen scraping to access banking data is on its way out.

Screen scraping is a degrading data access method, leaving lenders vulnerable to increased customer churn and negative brand perceptions, ultimately impacting the ability to attract new customers and their bottom line. 

If access to financial data via screen scraping goes down during the application process, you lose access to the information needed to quickly and efficiently make a lending decision, leaving you unable to service that customer at that time. 

Consumers have hundreds of options at their fingertips and are likely to look elsewhere if they encounter errors, issues or roadblocks such as failed screen scraping in the application process. Plus, screen scraping’s reliance on a customer remembering their online banking details can prove a major drop-off point, too. 

Here’s what we know:

  • Online fraud is on the rise: Australian customers and businesses lost an estimated $4 billion to scams in 2022 (nearly double the losses reported in 2021). In the wake of major data breaches, banks are levelling up their security measures through steps such as multi-factor authentication.

    The consequence? When it comes to web connectors, we are seeing a reduction in the speed data is returned, a decline in the reliability of some connectors and, in worst case scenarios, access to customer banking data is banned and only available via Open Banking (including Macquarie, HSBC and Qudos banks).
  • Consumers are hyper-security conscious: there have been a number of high-profile data breaches impacting Australian consumers over the past 12 months. With online fraud top-of-mind, consumers are more vigilant than ever when it comes to sharing their personal information. This could impact their willingness to share the login details required to access data via web connectors.
  • Screen scraping will be banned: significantly, the final paper from the Statutory Review of the CDR recommended banning web connectors in the near future when a viable alternative, such as Open Banking, is available. Our observations of CDR’s maturation indicates this day is quickly approaching and businesses will be forced to make the switch.

In contrast, Open Banking platforms will only get better with maturity. Already, the Open Banking ecosystem boasts 114 banks providing access to Open Banking data with a 98.88% connectivity success rate when data is requested (as of 1/3/23). 

What is Open Banking?

Launched in 2020, Open Banking is part of the Australian Government’s Consumer Data Right (CDR). Its aim is to give consumers greater control over their data, enabling them to securely share it with service providers (like lenders), drive industry competition, and support the development of new, innovative financial products and services. 

Ultimately, it’s the best way to future-proof data access, particularly for lenders looking to provide a fast, convenient digital experience to their customers.

The benefits of Open Banking for lending

At all stages of the lending lifecycle (from credit risk analysis and credit checks to settlement and repayments), creating and delivering value to your customers, while minimising risk to your business, is a top priority. 

Open Banking gives you the speed, reliability and security you need to get to ‘yes’ sooner, enabling automated credit decisioning and reducing loan application abandonment.

Along with helping to adhere to responsible lending guidelines, Open Banking offers rich data and insights your business needs to proactively identify new opportunities to support and service your customers. 

For lenders, Open Banking:

  • Boosts conversion rates and lowers credit application abandonment: we have already mentioned customers expect a fast and streamlined application experience that Open Banking can help deliver. 

    For major banks, the average connection time with Open Banking is 5x faster than via screen scraping.

    Plus, rather than relying on customers to remember their banking password (a significant issue when it comes to failed access via screen scraping), with Open Banking they securely login using their banking ID, mobile number and a one time password which boosts the chance of a successful connection by 30%.

    Frictionless access to customer data means a faster time to ‘yes’ and makes for a winning customer experience. 
  • Expands the scope of products and services lenders can provide and recommend: Open Banking enables access to more data attributes (more info below), in real time, via a one-time consent process where ongoing data access is available to the lender until it is withdrawn by the customer.

    This is a game changer for lenders, enabling them to shift from a single to multi-use service. Continued access to data via Open Banking means they can maintain their responsible lending obligations through the entire loan lifecycle and nip issues in the bud before they arise.

    For example, lenders could check whether customers have sufficient funds before taking a payment that could prevent dishonour fees if the funds are not available. They could proactively offer budgeting tools or tailored payment plans for customers experiencing financial hardship, or dynamic interest rates that adjust depending on financial behaviours.  

    Open Banking allows lenders to service and support their customers better, leading to greater customer satisfaction and retention.
  • More customer information at a lender’s fingertips  to assist with credit decisioning:  As we mentioned above, Open Banking allows access to data attributes not available via screen scraping, including additional account and transaction information.

    Account data via Open Banking offers a host of additional attributes relating to product interest rates and fees. When it comes to joint accounts, lenders can identify whether a customer is the owner of the account and from July this year they can view the number of account owners. 

    For transaction data, Open Banking offers a lot more data relating to payees and direct debits, as well as merchant name and merchant category code. 
  • Enables access to a wider pool of potential customers: as more institutions prevent screen scraping access to banking data and fully commit to Open Banking, lenders are able to service more customers than ever before. For example, HSBC, Qudos and Macquarie Bank don’t allow access to customer banking data unless it’s via Open Banking. What does this mean for lenders relying on screen scraping? Potential customers with these institutions will find it difficult to apply for products because they aren’t able to share their data during the application process. 
  • Unprecedented collaboration with financial institutions: Open Banking has seen banks and Accredited Data Recipients (ADRs) like Basiq working collaboratively to improve the reliability of connections, fix data and access issues and enhance performance.

Open Banking empowers lenders to upgrade and reimagine the experience of accessing online loans. With assessment tools and ongoing access to customer data at their fingertips, they can make more informed decisions, improve approval times and boost conversions. 

How Basiq is helping lenders transition to Open Banking 

The benefits of Open Banking for lending are clear, but we know that making the switch from screen scraping can seem daunting and complex. 

The future is now, which is why we’re calling on businesses (like lenders) to make the switch to Open Banking.

Important Information: This article has been prepared by Basiq Pty Ltd (ABN 95 616 592 011) (Company), and was originally published on 1 March 2023 on www.basiq.io. Information is current as at the publication date, and the Company has no obligation to update or correct this article. The information contained in this article 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 article 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. © 2023 Basiq Pty Ltd

Unlocking opportunities in the era of open data and payments

Posted on by Cuscal Limited

Under the government’s Digital Economy Strategy Australia is set to become “a leading digital economy and society by 2030”, with the Consumer Data Right (CDR) one of several initiatives designed to establish the right foundations to grow the digital economy.

Integrated data and technologies will make life easier for consumers and businesses, but enterprises face the challenges integrating legacy systems and infrastructure with real-time digital ecosystems. Cuscal can help enterprises bridge this gap, deploying new capabilities that support the collection, sharing, management and storage of consumer consent and CDR data. While our position at the centre of payments – as the leading provider of New Payment Platform (NPP) payment services to banks and payment service providers – means we are ideally positioned to help enterprises unlock new growth opportunities from the convergence of data and payment initiation services.

This white paper provides senior leaders and product owners with insights into some of the regulatory, technology, security and capabilities required to comply with the CDR today and how to unlock opportunities from the convergence of data and payments.

In this white paper you’ll learn more about:

  • What the CDR is, how it has evolved and what future legislative change may mean for Data Holders in designated industries, as well as for accredited Data Recipients;
  • How NPP capabilities are being enhanced and extended through the development of the PayTo service, supporting ‘write’ access for third party payment initiation from bank accounts in real-time, as envisaged under CDR;
  • What enterprises should consider to enable data-centric strategies that integrate with the CDR and real-time payments, and how Cuscal capabilities and payment expertise can facilitate participation across ecosystems;
  • Use cases demonstrating some of the ways in which the CDR and payment initiation can be applied to make life easier for consumers and businesses;
  • How Cuscal is assisting clients participate in the CDR with access to a suite of secure and robust capabilities for the collection, sharing, management and storage of data subject to CDR legislation; and
  • How Cuscal is enabling payment initiation services that are align with CDR and NPP PayTo frameworks for banks, payment service providers, fintechs and enterprises.

If you’d like to know more about how Cuscal can support your business participate in the CDR ecosystem and with real-time PayTo payment initiation, call 1300 650 501 or submit an enquiry.

Download the White Paper [PDF, 10 MB]

Cuscal announces membership of FDATA Australasia

Posted on by Cuscal Limited

Cuscal becomes a member of FDATA

Sydney, 18 March 2021 – Cuscal announced today that it will become the latest member of the Australasia chapter of the Financial Data and Technology Association (FDATA). Membership of FDATA will provide Cuscal with valuable advisory, regulatory and industry engagement opportunities through FDATA’s deep knowledge of Open Finance, network of global experts and position on working groups, advisory panels and task forces.

As a Consumer Data Right (CDR) intermediary, Cuscal is committed to supporting data holders, consumers and data recipients to connect safely and securely to unlock the value of data. Cuscal’s Collaborative Data Exchange will manage the technicalities of the CDR for data holders and data recipients, leaving enterprise to focus on one of the most powerful opportunities in Australian commerce. Forward intelligence from FDATA on key policy matters, changes and trends from Australia and across the globe will form part of the Collaborative Data Exchange’s program of continuous development, helping clients to respond to changes in the CDR, including the emergence of new regulation, expansion of the CDR to new designated industries, and updates to data-standards.

Commenting on Cuscal’s membership of the regional chapter, Richard Prior, CEO of FDATA, said:

FDATA is delighted to welcome Cuscal to our worldwide community of members. As Open Finance proliferates across the globe, FDATA shares Cuscal’s goal of enabling the future, supporting the delivery of Open Finance for Australia, and the enormous potential and ambition enshrined in the CDR.

Kieran McKenna, Chief Risk Officer at Cuscal, commented:

We’re delighted to be joining FDATA Australasia at this critical moment during the implementation of Open Banking in Australia. Through our membership we’re looking forward to representing the interest of our clients and engaging with FDATA’s community of members, the government, regulators, policy makers and other stakeholders to help guide the formulation of policies relating to Open Banking and Open Finance in Australia.

About FDATA
The Financial Data and Technology Association (FDATA) is a not-for-profit representing fintechs operating in Open Banking and Open Finance. FDATA work with government, policy makers, and regulators to implement a fair and ethical competitive landscape that promotes competition, innovation, and better consumer outcomes.

About Cuscal
For more than 50 years Cuscal has championed competition in banking and payments in Australia, leveraging our scale, banking knowledge, technical expertise and regulatory experience to deliver reliable and secure solutions that supports the flow of transactional data between customers and enterprises, ensuring fair access to the Australian payments and banking ecosystem.

Media contact
Simone Shields, sshields@cuscal.com.au

Product reference data sharing obligations commence for ADIs

Posted on by Cuscal Limited

Looking up at buildings in city at as sun is setting

Sydney, 1 October 2020 – Mandatory product reference data sharing obligations commenced today for non-major authorised deposit-taking institutions (ADIs), covering non-major banks, building societies and credit unions, and the non-primary brands of the major banks.

In compliance with the relevant laws, Rules and Data Standards for the Consumer Data Right (CDR), Cuscal has partnered with a number of clients, including Australian Unity Bank Limited, Bank Australia Limited and Bank of Sydney Ltd, to develop solutions that support compliance with product reference data obligations.

Commenting on clients achieving compliance with the first stage of CDR obligations, Cuscal CCO Bianca Bates said:

Despite the disruption caused by the COVID-19 pandemic, we’ve been able to work closely with our clients to successfully implement solutions supporting the disclosure of product reference data to the market. In some cases services have been implemented within as little as three weeks, ensuring clients have been able to comply with the timelines set by the Australian Competition and Consumer Commission.

We are proud that Australian Unity, Bank Australia and Bank of Sydney chose to partner with Cuscal to deliver this first Open Banking milestone and look forward to supporting them, and our other clients, unlock data to capture new opportunities for growth created by the CDR.

About Cuscal’s Open Banking services
Cuscal’s product reference data APIs form the foundations of a larger economy-wide Collaborative Data Exchange platform that Cuscal is developing in partnership with clients. The Collaborative Data Exchange will provide clients with a modular and flexible service that takes care of CDR compliance obligations and also unlocks greater data enablement opportunities.

Cuscal’s vision is to offer clients a simplified, modular and scalable technology platform that is extensible and interoperable across industries and partners, providing clients the freedom to:

  • implement their organisational data strategies and ambitions;
  • unlock legacy data stores to ensure greater flexibility regarding the use of existing data;
  • combine existing data with external sources, including cross-industry information, to derive valuable customer insights that support the delivery of personalised customer experiences;
  • build on platform functionality and apply APIs to novel new use cases with minimal capital investment and business disruption; and
  • innovate and partner with third parties of their choice to offer new data enabled experiences to customers.

Media contact
Jo Savill, jsavill@cuscal.com.au

Managing consumer consent in a digital economy

Posted on by Cuscal Limited

Consent management will be a critical function for the successful rollout and uptake of the Consumer Data Right (CDR). In order to meet regulatory obligations, organisations will be required to demonstrate that they have have in place secure and robust consent management capabilities and infrastructure that ensures they can:

  • Safely and securely share consumer data;
  • Efficiently manage customer consent preferences;
  • Maintain customer privacy; and
  • Meet the evolving compliance requirements of the CDR.

This is essential to establishing and maintain consumer trust and for realising the objectives of the CDR.

Watch the video for more on the role of consent management in a digital economy.

Product Data Store – foundational open data capabilities

Posted on by Cuscal Limited

From October 2020, all Australian authorised deposit-taking institutions (ADIs) will be required to begin sharing Product Reference Data.

Bank rates, fees and the features of banking products covered by Consumer Data Right (CDR) legislation must be available to be automatically accessed in machine readable format in order for ADIs to be compliant with this first major Open Banking milestone. However, operational workflows and technology constraints can present challenges to the streamlined flow of this product data.

Cuscal’s Product Data Store forms part of our flexible and modular approach to Open Banking, providing organisations with an end-to-end, managed solution that takes care of CDR compliance obligations and realisation of the value-added opportunities enabled by the CDR.

Getting your business ready for Open Banking

Posted on by Cuscal Limited


Open Banking is coming to Australia. When it arrives it will fundamentally change the way financial institutions manage and control their customer data. This will be the first step toward an ‘open data’ future which will also have ramifications for companies in other industry sectors and the broader Australian economy.

While there is certainty that Open Banking is coming, everything else is less clear. The obligations and corresponding opportunities are complex, evolving rapidly and the business cost of making the wrong decision is high.

To help companies with their Open Banking strategy, Cuscal, KPMG and King & Wood Mallesons jointly published a white paper and held a public webcast to discuss the key issues facing companies implementing Open Banking and looking to participate in an open data economy.

What the webcast covers?

  • What organisations should consider as part of their Open Banking strategy
  • What we can learn from open data regimes overseas
  • Examples of Open Banking innovation which have relevance in Australia
  • How to approach the compliance obligations while taking advantage of the opportunities

Open Banking is much more than a compliance exercise

Posted on by Cuscal Limited

Open Banking and open data

The economic, regulatory and technology landscape in banking and payments is constantly changing. This can lead some people to a kind of change fatigue, where each change is just another one for the pile. While this view is understandable, it can lead you to underestimate the impact of those changes which have much greater and longer-lasting impact. There is one change, coming soon, which will completely reshape banking and payments. I’m talking, of course, about Open Banking – the first application of the Consumer Data Right facilitating an economy-wide consumer-directed data transfer system.

What will this mean in terms of competition?

In the digital age there are heightened expectations about “experience” and how various elements of our life can be seamlessly integrated. An environment of open data, applied in a reciprocal manner, is essential to meeting these heightened expectations. Over time, we think that organisations that are unable to both facilitate and leverage open data will risk becoming irrelevant.

If you think about retail banking today, the ability to compete on product differentiation, price or distribution is very limited. Customer experience remains the greatest opportunity to compete.

This is one of the things that many of Cuscal’s banking clients do incredibly well and are rightfully proud of. However, the digital experience that their customers have has to be constantly improved and refined and the effective application of consumer data will be absolutely key to the future of their success in this area.

When is the right time to enable Open Banking?

It may be tempting to sit back and wait for more progress and certainty in relation to Open Banking and open data. I don’t think this approach is the right one for most financial institutions.

It’s going to be next to impossible to get the timing exactly right for Open Banking.

You will likely either be too early or too late in relation to Open Banking, so you will need to make a deliberate choice about which of these outcomes you want for your organisation.

If you decide to be early, it’s important to move on from compliance-type-thinking towards thinking about the opportunity to compete, enhance the relevance of your organisation and improve your relationship with your customers.

Collaboration will be the key.

The nascent open data economy will be big, complex and uncertain. Exactly how things will develop over time is unclear. I don’t think any single organisation has all of the skills and resources needed to fully maximise this opportunity. Partnering with complementary organisations across the Open Banking value chain, to solve a specific problem or remove friction points, will be crucial to success.

There are a number of related developments that also need to be taken into consideration to create value for customers and enable safe and efficient access to data, such as digital ID, consent management, and the role that NPP may play in Open Banking and open data. We expect developments around open data to progress to payment initiation over time, as they have in other areas.

Just as we have done with the New Payments Platform and The Pays (Apple Pay, Google Pay and Samsung Pay) Cuscal will leverage our strengths across payments data exchange and the development of innovative customer-focused mobile solutions to enable clients to participate in Open Banking, providing support across multiple areas in the lead up to implementation and beyond.

To fulfil the ambition of the ACCC and Treasury of giving customers more control over their information, choice in their banking and convenience in managing their money we will provide clients and others with an opportunity to leverage economies of scale and multi-client solutions to interact with the open data economy.

We are at the beginning of an “always on” and “open data” world. Empowering people to take control, and maximise the utility of, their data will be the foundation of this future.

Read our white paper (published in collaboration with King & Wood Mallesons and KPMG) to find out more of our thinking.

By Craig Kennedy, Managing Director of Cuscal

Open Banking deep dive with Scott Farrell

Posted on by Cuscal Limited

Scott Farrell, Partner KWM gave a snapshot of the Australian Government’s review of Open Banking in Australia at Curious Thinkers 2018 in Sydney.

Scott outlined how open banking is designed to give customers greater control over their data, giving them more choice in banking and convenience in managing their money.

He discussed how open banking is part of consumers’ broader data rights in Australia. The consumer data right will first apply to the banking sector, with others sectors set to follow.

Brett Miller (Data Action), Danny Gilligan (Data Republic), Ian Pollari (KPMG), & Vanessa Chapman (NPPA) joined Scott in an open banking panel discussion where they discussed the challenges of the timeline for open banking regulation in Australia, the opportunities it presents and the role FinTechs will play in open banking.

Watch the open banking deep dive video to learn more.