What Australia can learn from the UK on open banking

The British financial services sector has experienced a major evolution since open-banking regulations came into force in early 2018. Many firms there would concede it got off to slow start.

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Open banking will be mandated in Australia with a phased implementation commencing  July 2019. That means the sector will have the benefit of hindsight and the opportunity to learn from the UK’s implementation. 

"The major [UK] players were so focused on complying with new regulations it became more of a tick-box exercise than an opportunity to create new and better experiences for consumers.”

If done well, Australia has an opportunity to take the lead in industries like machine learning and AI.


While the UK’s response was to launch a plethora of financial management tools on the back of the new open-banking regulations, it’s too early to have seen the industry transformation some might have expected.

The UK’s approach leant heavily on technical implementation. Like any large industry transformation, the major players were so focused on complying with new regulations it became more of a tick-box exercise than an opportunity to create new and better experiences for consumers.

The UK’s banking sector was ready for the January deadline this year but there were only a few accredited third parties ready to access the data. This meant at launch there was likely insufficient testing for business needs and this impacted the end consumer.

The market is now largely playing catch-up on key components like consumer education, consumer adoption, user experience and next-generation standards.

As a result UK consumers are experiencing a version of open banking that is not the ideal implementation – but at least it’s a start. The intention is, over time, for open banking to become more and more reliable, scalable and frictionless.

Although it can be tempting to launch something perfect, sometimes it’s better to get technology to market so real consumers shape it and it evolves in line with their expectations.

A month after open banking’s introduction in the UK many accredited financial services players were still testing their systems. Six months later the process was underway and the industry is now completing millions of financial transactions each month.

Month on month usage statistics show the number of transactions is steadily growing and this will likely be the case for many years to come. These are indeed signs of resonance with consumers.


So if we look at the UK as an example of how an open banking program can roll out it’s unlikely open banking will start with a bang in Australia but instead be a slow burn as consumers slowly engage with newfound rights to move their financial information around.

The experiences the financial sector create now will build the foundations of trust consumers will need to have in order for new industries to emerge and - given Australia is among the few nations moving quickly on our open banking framework - that means the industry will be learning about data exchange trust before many developed nations.

The great news in Australia is the consumer will be at the centre of data exchange, meaning nothing will move without the consumer’s consent. I am certainly thankful the machines of the future will operate at my command and for my benefit - and not on their own!

So while viewing the experiences of the UK is important, it’s not everything that needs to be thought about.

Businesses in particular need to be thinking hard about how their experiences will build trust with consumers in the very short term and how they will continue to evolve and build new experiences off that trust as their access to their data grows. Ask any product experience creator - that’s not an easy task!

Businesses are already facing the compliance burden of open banking. However this will soon shift to the consumption conundrum as new entrants start to experiment via new and exciting experiences in places where traditionally only few players have participated.

The trick for existing businesses will not just be to allocate enough resources for compliance but - at the same time - to plan for how they can tactically respond and delight customers with the new data sets. Those who get the balance right and move towards a machine-automated world with confidencewill no doubt be well positioned for years to come.

Talent acquisition, thought leadership in future technologies, system transformation, credit policy evolution and many more challenges will need to be faced all at once and in harmony for established players.


For new entrants the challenges will be very different. They may have no brand or customer base so for them the focus will be about which methods of engagement will deliver maximum trust in an environment where trust is already established – essential if they are to acquire data with consumer consent.

Partnerships, marketing spend and tricky user experiences will all play a role in testing consumer appetite as they have always done however this time the data sets will arguably be more structured and the rules clearer than ever.

It’s easy to see a world where this data, with customer consent, gives rise to wildly different sorts of businesses.

Financial butlers - voice command for services and information - are already either in existence or very close by. But the curation of experiences that land consumers in the right place at the right time on their product choice path - based on data very close to real time - will start to unlock some interesting interactions between humans and machines.

Open data is a key that will unlock understanding but it is not the execution. The execution is limited by human creativity so the skills needed now are creative as well as technical. If the UK is anything to go by those creative juices are yet to truly start to flow off the back of open data and Australia might see the same thing in the initial years.


So here we are at the beginning of open banking. The industry will need to be ready for it because it is set to reshape our industries in a fundamental way. But like many big changes, things will take time to set in. The players need to understand the rules and the power of the information at hand.

Over time innovation will take root and things will take off. Industry development and job creation will no doubt start to flow and they will likely stretch far beyond financial services.

Given open banking is part of a wider push around open data it will be the catalyst that fosters opportunities across industries. Let’s see how the financial sector goes first.

There is much potential for Australia to successfully implement open banking and for both businesses and consumers to benefit from the many opportunities it will present.

By observing the UK’s approach the Australian financial services industry can position itself to launch with the confidence of hindsight but still aim for standards that work really well from day one.

Alex Scriven is Head of Open Data and Portfolio Management at Equifax

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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