Frollo, a financial management software company, is the first fintech and second company overall to receive accreditation as a data recipient in Australia’s upcoming Consumer Data Right system.
On Friday the ACCC announced Frollo will join Regional Australia Bank as accredited data recipients in the data portability scheme set to be applied to banking from July, known as Open Banking.
Frollo says it has been granted accreditation at an “unrestricted” level, meaning it will be able to access banking data as well as telecommunications and energy data when those sectors are eventually brought into the Consumer Data Right system.
Under open banking, consumers can request banks share their financial data with them or an accredited third party. The regime is designed to improve competition and spur innovation in financial services by giving consumers more access to their financial data, and will be overseen by consumer and privacy regulators.
Frollo customers, for example, will be able to request major banks share their data via API for use with a Frollo product or service. The fintech says the capability should help customers better manage their finances and reduce debt by identifying unnecessary credit card fees or missed bonus interest.
Frollo founder, Gareth Gumbley, told Which-50 the accreditation is a significant milestone for the digital finance platform.
“We already help users get a fuller picture of their finances. Open Banking will get us better quality data, faster and cheaper, with more transparency for our users. With the benefits of Open Banking data, we’ll be able to help them understand if they are making the most out of the financial products they are using, or if there are better products out there for them.”
Gumbley says there is growing interest in the Open Banking scheme, which has had a stunted start with several delays since being announced for Australia in 2017. Now set to begin in July with Australia’s big four banks sharing data in a managed rollout, Gumbley says Frollo’s banking partners are interested in how they can comply, compete and innovate under the Consumer Data Right.
And while some banks expect customer benefits will take years to flow, Gumbley argues his company will be able to help its customers almost immediately.
“Initially, the impact will be a more transparent consent process of sharing data and a much faster experience of seeing their data. Through a combination of Open Banking product and transaction data, Frollo will also be able to show consumers where they’re missing out, paying too much ‘lazy tax’ or should switch to a better deal with their existing bank or a competitor.”
As open banking matures, Gumbley says he expects more fintechs to enter the market and develop more use cases for the newly unlocked data.
“This will lead to more competition, more innovation and ultimately a better deal for consumers.”