Open banking leads to shift in data power

  • By Kate Weber

Data, control and trust raise big questions when it comes to open banking which is set to hit Australian banks this July. 

Nick Smith, MD of Informatica ANZ says the new era of open banking means consumers now have more control, with banks required to have data in a format that can be shared for better customer outcomes. 

“The power of who controls the relationship has changed from 30 years ago. From big banks, going into a branch sitting down with a bank manager having a chat about what you can or can't do, to now doing everything on an app and it's very agile. 

“You don't have to speak to a human being, and you can switch very quickly.”

Smith also added as the world becomes more “individual centric” the power certainly is coming down to “you and I, as the power of one as opposed to the power of many’ leading to better consumer outcomes. 

Consequently, the perception of trust is vital to consumers and any breach of trust will result in a decline of business. 

“The perception of a breach of trust means a consumer is very likely to leave your organisation. 

“We as individuals have the power of our data but the organisations that we interact with have got to be very clear and very transparent in how they use that data because if they're not, then again they will vote with their feet.

“That's a very powerful threat or competitive pressure that consumers bring to this open data world which is great.”

Banking institutions must take patron data seriously if they wish to flourish in a post open data banking world and make sure there are defined terms for ‘customer’ that follow proper technology structure and regulatory requirements. 

“The first thing any organisation has to do if they want to be taken seriously in an open data world is to have the board understanding that data is a critical asset for their organisation.

“They have to take a genuine enterprise view of the data.”

The second action is defining what a customer is in a single definition to direct how companies use that information. 

“That seems like a very obvious thing to say, but not every organisation has a single definition of what a customer is and how they want to use information. 

“Getting that view of your vision, your purpose and how you want to use information is critical.” 

Smith said the technology aspects around how banks make sure consumers can find the information as well include enabling proper security and governance controls. 

“A board level overview is critical, that enterprise view of what you're trying to do is critical. That vision of what you're trying to do is critical.” 

Overall, Smith said open banking is about "ensuring that you you bring all information together and you collaborate with the right people in your business to provide the better outcomes to the individual." 

"The governance framework is critical, but it's gone from being just about reporting and regulations to collaboration and outcomes."