Open banking guru and Head of Product for Envestnet | Yodlee, Tonia Berglund and Jamie Leach from global open banking industry body FData, are leading the way for Australia’s open banking sector. We sat down with both Tonia and Jamie to discuss the recent developments in Australia’s open banking regime, including the recent change by the Treasury to amend the Consumer Data Right (CDR), giving consumers greater access to, and control over, their data.
You are both leading figures in the Australian open banking sector, tell us about your impressive careers and the roles you are currently in?
Tonia: As Director of Product at Envestnet | Yodlee, I define, communicate and drive a product strategy and a cohesive approach to data usage in Australia and New Zealand. We have a strong focus on Open Banking and enabling a vibrant financial services marketplace that benefits all Australian businesses and consumers in their ability to achieve financial wellness.
I have spent the last 18 years driving digital change as a senior leader in the Technology and Finance sectors, working in large and small organisations including CBA, Westpac and the Federal Government. I hold Post Graduate Degrees in Business and IT and have been at the forefront of heading up teams to move systems and processes online across business, wealth and retail divisions. With programs ranging from launching online lending platforms to fund business customers in less than a week, to building partnerships between banks and FinTechs, my vision has always been to bring innovation to the industry. Ultimately all of us at Envestnet | Yodlee are committed to enabling more personalised banking and finance experiences for both businesses and consumers, in Australia and New Zealand.
Jamie: I am currently the Regional Director for Australia/New Zealand of Global Association FDATA, the founder of Open Data Australia™ and an advisor to the United Nations’ Capital Develop Fund and World Bank on Digital Identity and Financial Inclusion.
I’ve had a diverse corporate career, having held senior roles across the banking, technology, defence, and telecommunications sectors. My work with data commenced as an Electronic Warfare Linguist in the Royal Australian Navy, transitioning into technical finance roles, before culminating in the leadership of tech companies focused on predictive analytics, geospatial disciplines, and the application of artificial intelligence.
My work on the Consumer Data Right (CDR) sees the amalgamation of my financial services career, my continuing work with public policy, and my passion for increasing the quality and portability of data.
What is open banking and why do we need to know more about it?
Tonia: Open Banking, or more broadly the Consumer Data Right (CDR), involves organisations enabling their customers to share their banking or other data with accredited third parties via secure APIs. Through APIs, finance companies can tap into consumer permissioned data in real-time, enabling them to constantly serve their customers’ needs and innovate accordingly.
The potential use cases are huge. It could, for example, result in better lending decisions for consumers, an improved ability to track spending behaviour, and the ability to save and invest automatically as well as compare products and services more easily and effectively.
Open Banking is such that its use cases and capabilities vastly improve with adoption. Its ability to permeate many more use cases beyond finance means it can empower consumers in ways we haven’t even thought of yet. Open Banking has been rapidly developing around the world and we’re excited to be helping unlock its potential in Australia.
Jamie: I will add that open Banking was born out of an increased consumer demand for control, protection and transparency in relation to personal financial data, so as the concept continues to evolve, Australian consumers are those set to benefit the most. A fully developed Open Banking regime will see consumers have full control over who their data is shared with, access to more useful and personalised financial tools and a greater level of security.
Essentially, the ability for consumers to direct the right data, at the right time, into the right hands means a fit-for-purpose and personalised experience that will ultimately enhance the customer experience, and allow those long-anticipated data-driven decisions powered by elevated consumer protections.
July saw two major developments in Open Banking, the first is non-major authorised deposit-taking institutions (ADI’s) which are now required to allow customers to share account and transaction data, increasing the number of players involved in Open Banking. What does this mean for consumers?
Jamie: The addition of non-major ADIs to Australia’s Open Banking regime means that financial institutions outside of just the big four banks must now be set up to share and receive consumers’ financial information.
While the process of on-boarding these additional institutions has been slower than expected, consumers are ultimately set to benefit from their introduction. Open Banking will become increasingly useful for consumers as the number of participating institutions grows – not only will this increase competition and ultimately lead to better financial products being developed, but it will also allow more consumer data to reach the intended application, enabling the realisation of consumer expectations to be met. In turn, this will allow brands and participants to offer consumers more useful and insightful financial products.
The second is CDR and the amendments recently made by Treasury to introduce a sponsorship and representative model which would allow smaller FinTechs to be able to enter the world of open banking by leveraging the accreditation of bigger players. Again, what does this mean for consumers?
Tonia: Currently, to participate in the world of Open Banking, you must gain unrestricted accredited data recipient (ADR) accreditation from the Australian Competition and Consumer Commission (ACCC). This process can be costly and means the barrier to entry is often too high for start-ups and smaller companies.
Last month, Treasury proposed four new models for FinTechs to participate in open banking, one of which was a CDR Representative model which, in essence, would allow smaller companies to leverage the accreditation of bigger institutions to access open banking data.
Should the proposal go through, this would mean additional good news for Aussie consumers. Allowing start-ups and smaller FinTechs to join the open banking regime would see further competition and innovation in the sector, ultimately resulting in better financial products and services for consumers.
What are the barriers to making Open Banking available in Australia? Has the COVID-19 pandemic had an effect on progress?
Tonia: With the CDR still in its relative infancy, there is still some way to go before the true potential of Open Banking is realised in Australia. For example, there are a number of data sources that are currently outside the scope of the CDR, including superannuation and investment accounts. This means that data from these accounts currently cannot be shared as part of the Open Banking regime, limiting the financial picture that can be created of a consumer, and ultimately the products that can be offered to Australians.
Technologies such as secure data access – a more traditional way of accessing consumer-permissioned financial data, which has been used by leading financial service providers for over 20 years – can help bridge these gaps. Secure data access isn’t limited with regards to the user permissioned financial data it can access, meaning that a hybrid approach – which incorporates the use of Open Banking with methods – can enable finance organisations to utilise data points such as superannuation, while still tapping into the benefits of Open Banking.
Envestnet | Yodlee’s Financial Data Aggregation via consumer-permissioned secure data access is currently powering some of Australia’s most exciting FinTechs, including neobank 86 400 which uses this technology to give its customers the ability to see all their accounts from over 100 financial institutions in one place.
COVID-19 has certainly accelerated the need for open data sources with more consumers having to move their financial servicing needs online. A recent survey of 5000 consumers and 300 banking and insurance executives in Australia found 91 per cent of customers are interested in banks and insurers using data to personalise their offerings through tailored pricing and services.
What does the future of banking look like?
Tonia: It’s going to be quite a change from what we’ve become accustomed to. With a fully functioning CDR regime, where consumer permissioned data is shared among financial institutions via advanced APIs in real-time, there will be a more competitive, vibrant financial industry with a wide variety of options to suit everyone’s needs. This is what we’re trying to achieve. Our solutions are ultimately about enabling our partners to provide products and services that deliver better financial wellness to their customers. With a fully functioning Open Banking environment, Australia will be better off than it is today.
About Tonia Berglund
As Director of Product, Tonia oversees Envestnet I Yodlee’s data aggregation, enrichment and wellness solutions in Australia and New Zealand with a strong focus on Open Banking and what benefits an open data ecosystem can bring to Australian Banks and Fintechs. With over 18 years’ experience in the Finance sector, Tonia has led teams across CBA, Westpac and the Federal Government all with the vision of transforming the way industry can innovate and change towards a better banking experience for Australian business and consumers.
Tonia holds post graduate degrees in Computer Science (Grad Dip CSci) and Business Administration (MBA) plus an under-graduate degree in Education (BEd). She has led programs from launching and improving core lending systems to partnerships between Banks and Fintechs. She brings her passion and experience in technology, banking and product innovation to her role at Envestnet / Yodlee, helping to guide banks and Fintechs to innovate and change driving better and more secure customer outcomes.
About Jamie Leach
Jamie Leach is a data champion, fintech fanatic, Regional Director for Australia/New Zealand of Global Association FDATA and founder of Open Data Australia™.
She has experienced a diverse corporate career, holding senior roles across the banking, technology, defence, and telecommunications sectors. Her work with data commenced as an Electronic Warfare Linguist in the Royal Australian Navy, transitioning into technical finance roles, before culminating in the leadership of tech companies focused on predictive analytics, geospatial disciplines, and the application of artificial intelligence.
Her work on the CDR sees the amalgamation of her extensive financial services career, her continuing work with public policy, and her passion for increasing the quality and portability of data. Through her thought-leadership on data portability and leveraging artificial intelligence to enhance the customer experience, Jamie has worked with numerous banking brands and international vendors on re-designing and engineering their open banking/open energy solutions and policies.
An advisor to the United Nation’s Capital Develop Fund, Jamie’s work includes Digital Identity, Digital Finance, and Financial Inclusion across developing nations, both in technology and policy development.