Regional Australia Bank is using Microsoft’s Azure cloud to automate and streamline its loan applications under Open Banking, and plans to also share its customer data with third party fintechs by next year.

The customer owned bank became the first Accredited Data Recipient of Australia’s Consumer Data Right in March, meaning it has clearance to receive customer data from other banks via APIs.

It is all possible because of Australia’s new Consumer Data Right, first being applied to the finance sector under Open Banking. The big four banks must now share customers’ data, when requested, with other accredited data recipients in a machine readable way.

The data portability scheme is designed to promote competition and consumer outcomes by reducing barriers to switching and spurring innovation through data access.

The scheme began in July this year with the mandated sharing of product data but will soon be extended to customers’ transaction data. So far Regional Australia Bank, fintech Frollo and accounting software provider Intuit are the only accredited data recipients.

But more are expected to come after rule changes by the regulator this month allowed intermediaries to facilitate data sharing, following reports of participants struggling to meet accreditation requirements.

Regional Australia Bank use case

In a Microsoft blog post announcing Regional Australia Bank use of Azure and its API management Service for Open Banking, Rob Hale, Chief Digital Officer of Regional Australia Bank said the new system will save customers time and effort.

“Our initial CDR use case is being optimised to take the bad friction out of online lending – the uploading of bank statements and asking applicants to say how much they spend on education, transport, travel etc.  We can automate that whole process which creates more time to have a human conversation about someone’s financial needs.”

Hale explained Regional Australia Bank, as an accredited recipient, collects data from the majors via APIs when requested by customers, processes it to use in the loan application and deletes the original data “within a matter of seconds”. A high level summary of the CDR data is created for the loan application and securely stored on core systems.

The bank has spent nearly nine months working on its solution, collaborating with regulators, the big four banks and other early data recipients.

Hale said the bank also sees value in being an accredited data holder, which would allow Regional Australia Bank customers to share their data with third party fintechs and other banks. But the bank would use a vendor supplied and managed solution for holding data.

“[I]f  our customers can get a service they like elsewhere, perhaps a personal financial management solution or some budget tool that’s better than the one we offer, then we want to facilitate their safe use of that tool.”

Hale said Regional Australia Bank will commence sharing of product reference data by 1 October 2020 and then commence publication of consumer data by 1 March 2021, “or sooner if we can”.

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