Open Banking: 1 in 3 Australians willing to allow banks to share their data

The research also found Australian consumers are less willing than those in other Asia Pacific countries to embrace new bank services based on emerging technologies such as artificial intelligence (AI) and machine learning – but younger generations are driving change.

Unisys APAC Banking Insights – Banking on the CX Factor is a study about the attitudes of banking customers in Australia, Hong Kong, Malaysia, the Philippines and Taiwan. This year’s report explores how consumers feel about banks using AI to assess eligibility for credit cards and home loans, as well as sentiment toward banks sharing data with non-bank entities to offer new services – known as Open Banking.

Readiness for Open Banking

Open Banking is a growing initiative in the financial services sector that allows banks to share data with other organizations to offer new services to customers and new revenue streams for the banks. The Australian Government will phase in Open Banking by 1 July 2019.

Thirty-one percent of Australians support their bank sharing their personal data with other companies to access financial products. However, 34 percent don’t support it, citing concerns about privacy and security. Of those who do not support data sharing, 67 percent say it is because they want to protect their privacy, 45 percent are concerned about the other company’s security measures, compared to only 35 percent being concerned about the bank’s security measures. Australia recorded the highest proportion of people, 35 percent, who could not say if they supported this type of data sharing or not.

“For Open Banking to take off in Australia, banks must address customer concerns about how they protect their customer data – not just in the bank, but across all of the departments, partners and agencies in the value chain. The results also indicate that many Australians are unaware of Open Banking and how it impacts them so effective communication by the banks will be key to consumers embracing this initiative,” says Richard Parker, vice president financial services, Unisys Asia Pacific.

Balancing Artificial Intelligence with the Human Touch

The survey reveals that while Australian bank customers are the least comfortable overall with their bank using software algorithms to access eligibility for credit cards and home loans, younger generations are much more willing than those aged over 50 years. The type of transaction also impacts willingness: forty-two percent of Australians are comfortable with their bank using software and algorithms to assess online credit card applications, whereas only 29 percent are willing to use this for home loans.

“Younger consumers are driving the demand for better online bank services in Australia – this generational pull is stronger here than in the other countries surveyed. As a result, traditional banks are facing increasing competition from online fintech lenders. There is a great opportunity for banks to embrace the fintech approach and use smart software to lead decision making for commodity products such as credit cards,” said Parker.

Unisys is helping banks to address these concerns with Elevate™, an end-to-end, digital banking software platform and suite of applications designed to help financial institutions deliver an instantly secure, omnichannel banking experience to their customers. Importantly, this means customers can pay their bills on the go, transfer funds and apply for loans and mortgages anytime, anywhere – regardless of whether they are doing so on a mobile device or tablet, via an internet browser or inside a branch.

Elevate incorporates a high-level of security, as built-in adaptive biometric and data analytics securely identify customers, authenticate access and validate transactions. The platform is secured with Unisys Stealth®, an identity-based microsegmentation security software that allows banks to microsegment and conceal critical assets and establish encrypted channels for secure user, application and system communication.