Research released today by payments technology leader Waave reveals that consumer awareness of Open Banking in Australia remains extremely low despite the introduction of Australia’s Consumer Data Right (CDR) legislation almost five years ago.
The Consumer Data Right (CDR), introduced in 2019, is a set of laws that give consumers the ability to safely share their data with a business that can use these insights to their benefit. The first use case of this is Open Banking, which draws on consumers’ banking and spending data to give them access to relevant financial products, like better mortgage rates, fast Account-to-Account payments, and spending insights data. With the CDR, consumers have control; they can decide if they want to share their data with an accredited CDR data recipient, and for how long. In the past, their data would be owned exclusively by the provider of the service or product.
In the national study, two thirds of Australians (68%) said they had never heard the term ‘Open Banking’ previously, versus around one third (32%) who said they are familiar with it, and one 1 in ten (9%) who said they know ‘a lot’ about Open Banking.
Key findings from the research include:
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Over two thirds (68%) of Australians have never heard the term ‘Open Banking’ before.
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One in ten (9%) say they know ‘a lot’ about it.
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Among those who know what Open Banking is:
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40% think their personal data will be made publicly available when using Open Banking.
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Three in ten (31%) think Open Banking is more secure than traditional banking.
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Close to half (45%) believe that Open Banking has the potential to improve their financial position.
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Almost half (43%) think that Open Banking will create a fairer payments and banking system.
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Men, Millennials and middle income earners claim the highest awareness of Open Banking.
Open Banking showing promise to improve finances
However, among those who claim to know what Open Banking is, there are promising signs that consumers believe it can positively alter their finances and the financial system. Three in ten (31%) think Open Banking is more secure than traditional banking, close to half (45%) believe that Open banking has the potential to improve their financial position, and almost half (43%) think that Open Banking will create a fairer payments and banking system.
Overwhelmingly the greatest consumer misconception around Open Banking relates to data sharing. A staggering 40% of people who claim to know what Open Banking is believe their personal data would be made publicly available.
“It is troubling but not shocking to see such low consumer awareness of Open Banking given the lack of consumer education and promotion. The impact is that consumers are missing out on the financial benefits of Open Banking and putting themselves at greater cybersecurity risk by reverting to unscrupulous data sharing methods,” said Ben Zyl, co-founder and CEO and Waave. “Unless the government mandates the use of Open Banking for data sharing, Aussies will stick to what is familiar and continue to miss out on the benefits.”
Jill Berry, CEO of leading Australian Open Data intermediary Adatree, said: “We continue to be frustrated by the lack of communication around the benefits of CDR and Open Banking. By this point Australia’s CDR should be a model for the rest of the world. These findings should be a wake-up call for Treasury to implement the consumer communications campaign they’ve been promising for years.”
