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What will open banking mean for you?


Soon, according to a recent article in news.com.au Australians will have greater control over their personal finance data claiming that it will give us the ability to switch lenders more easily to get a better deal but not everyone's convinced.

The article leads with the statement that it's 'currently difficult to access your own information' and 'it's also difficult to shop around for better deals because your bank wont share your data with rival lenders'...

Firstly, if you use a broker you have both those 'difficulties' sorted. You don't need to have your bank share your data with another lender to swap lenders or get a better deal!!!

That could be the end of my article for today however let's look at what open banking might look like post July 1 this year.

It appears to be an opt in, that is you can opt in to the scheme and does seem to be a situation that you can opt in for a particular business or organisation and also set an expiry date. Obviously it will require a certain level of diligence on your own part to ensure that your data isn't shared with businesses that aren't reputable and likely to hold to the appropriate level of privacy etc. Okay. But this would seem a tough job for us all on an ongoing basis and there may be some data we'd prefer not to share.

The article does also offer a level of concern for those who might be in a financial hardship situation as these people would seem to be, quoting the article 'valuable to a lot of fringe lenders and other services'. So again I would be suggesting even more strongly that if you are experiencing financial hardship and you own a property that you talk to a broker who can walk that journey with you.

The article also says that open banking should bring more competition to the industry which should bring more options and offers but I think I'll wait until after July to see exactly what open banking turns out to mean.

In the meantime, encourage your family and friends to see a broker anytime they are looking to take out a new loan or review a current one. Using a broker protects you; they work for you and your big picture, not the banks!!!

Here's the article.

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