Next month, peer-to-peer lender SocietyOne will start publicly reporting positive customer data to credit bureaus as part of the shift towards a fully-fledged comprehensive credit reporting (CCR) regime.
The marketplace lender will join two other fintechs - Ratesetter Australia and MoneyPlace - that earlier embraced data sharing so as to better assess loan applications.
SocietyOne chief executive, Jason Yetton, said CCR was designed to help people get a better deal based on their own individual circumstances.
“This will empower Australian consumers in a way they haven’t been previously and I applaud the Federal Government’s initiatives on CCR and open banking which have finally seen some of the big players in the banking industry pledge their support for a proper and positive credit reporting regime."
“It also means that when CCR comes into full force sometime next year, Australia will have finally caught up with the vast majority of countries, including the UK and the US, where positive comprehensive credit reporting has been the norm for decades.”
Time for Canberra to act
The banks' refusal to provide positive customer data into the comprehensive reporting regime has certainly not helped Ratesetter Australia which started publicly sharing data back in May 2015.
"There are still fewer than 1 per cent of customer accounts that have comprehensive credit data available which is outrageous," said the peer-to-peer lender’s chief executive, Daniel Foggo.
“Two of the big four banks are now saying they are moving towards sharing data, but we don’t believe they will meet a sensible timetable, and at least one is still refusing to say whether they will share at all.
“It’s clearly time for Government to keep to their budget promise and introduce mandatory CCR legislation before year end."
Among the big four banks, National Australia Bank has promised to start providing positive consumer credit data from next February while the Commonwealth Bank has said it will do the same for its home loan customers before the end of 2018.
However, CBA has not said when it will provide comprehensive credit data for the rest of its retail banking customers.
ANZ confirmed on Friday that will sign on during the second half of 2018.
Westpac, chief executive Brian Hartzer recently told a parliamentary committee that the lender is committed to CCR and planning to "probably be live mid next year."
In Yetton's view, the banks are getting on board now in a bid to avoid legislation.
Plus, he argued, there is a sense they should be seen to do the right thing.
"Once NAB moved, chances are the rest would follow suit," he said.
And, according to the fintech boss, two major banks providing data is a game changer.
Actions not words
"So far we have announcements of intent that would lead to a tipping point in 2018. But the banks must follow up their words with actions and they should do it faster."
“The banks should all get on board and do that now rather than have to wait for the Government to force everyone to act in their customers’ interest through legislation.
While there are only three consumer credit providers making positive credit data available, another 15 or so are understood to be participating in CCR in “private” mode.
"To be fully effective it requires all the major banks and lenders to start contributing for CCR," Yetton said.
“While we are seeing the traditional players taking steps in the right direction, there is still a sense that the industry is being dragged kicking and screaming to do what is best for all Australians."