Data security the focus in first CX report into open banking

  • By Christine St Anne

Clarity on data use and sharing and using simple language to tackle issues around trust and security are some of the key findings in the first customer experience report on open banking by the Consumer Data Standards team.

The Consumer Data Standards team has been tasked to develop standards for the Consumer Data Right

Phase one of the Consumer Data Standards report surveyed 80 people over the age of 30 who were considered to be “extreme” users; vulnerable consumers; those with accessibility needs and those with varying English, financial, and digital literacy.

According to the report, “this allowed critical issues to be surfaced early”.

“This is the first of the CX reports which is now open for comment. It’s still early days but it’s a good start,” MoneyTree founder Ross Sharrott said.

Sharrott is a member of the advisory committee to the Consumer Data Standards body.  

He acknowledged that the delayed deadline for the big banks on open banking will give the committee and industry more time to research and test ideas around open data with consumers.

“It will allow us more time to solve issues around the consumer experience before open banking is rolled out.” Sharrott said.

“The worse case scenario is the implementation of a poorly designed scheme that is not trusted by consumers.”

The committee recommended a number of focus areas for the sector.

These focus areas included: avoiding ague descriptions of data use; justify requests for data; indicate the time and effort required to provide consent; ensure language is written from a consumer perspective; make language clear, understandable, and accessible; give consumers a record of their data sharing agreement; give data sharing control to consumers to gain trust;’ provide non-digital revocation channels and educate consumers on how data can be used.

Among these recommendations, making it easy for consumers to do their banking was key.

“Consumers aren’t fronting up to institutions and saying I am here to exercise my data right. They don’t see it in policy terms,” Sharrott said.

“They just want experiences like applying for loans or filing their tax returns to be made a lot easier.

If open banking and CCR [comprehensive credit reporting] is done right, they may not think of open banking per se but they will know how to share their data and trust the process.”

Indeed the report did highlight issues around data sharing.

Fear of sharing data was driven by data breaches from Facebook and MyHealthRecord and trust issues under the Royal Commission.

Negative experiences with stolen credit cards or hacked data were other contributing factors.

Nearly 63 per cent of those surveyed mentioned security as a critical concern.

The willingness to share data also depended on the context.

Although 3 per cent of respondents said they wouldn’t share their personal banking data with companies outside their bank, 55 per cent were willing if the benefit or purpose was clear.

The findings compliment a recent RFi Group global research which found that consumers saw a number of clear benefits to open banking including speeding up new product applications and approvals; access to more reliable, tailored and personalised financial advice and ease in finding the best deals for new products and services.

“RFi Group research also suggests that Australians would be hesitant to share their data without guarantees and further information around who would control their data and how it would be used,” RFi Group research director Kate Wilson she said.

Going forward, Sharrott said the committee would remain focused on creating a set of data standards that will meet the goal of open banking.

“In Australia, open banking is broadly about open data as unlike other countries the policy framework is aimed ambitiously at multiple sectors. It is challenging.”