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Open banking isn't just about data, it's how you use it that counts

Open banking delivers financial data in new ways to power decisions and improve choice, convenience and confidence.

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15 Apr 2022
Financial silos are crumbling as open banking delivers consented, protected financial data to parties with a strong use case. But data is not action. It does not make the decision for you.The question some are now asking is how can we use open banking data to improve - and even automate - personal and business decisions in real-time? As companies across Australia come to realise the power of the raw financial data now at their fingertips, they need to turn that data into insights to power meaningful decision making. The Consumer Data Right (CDR) enables this opportunity, turning that raw CDR data into the kind of decision-informing insights we need today. 

Structured data insights for credit and lending decisions

Turning banking data into insights is what TrueLayer's newest client, MogoPlus, is a specialist in for credit and lending.We're not talking about general analytics or 'plain vanilla' insights either, but cutting edge behavioural indicators, verified data patterns and sophisticated pattern recognition. All using processes that are aligned to the full range of loan products across consumer and business sectors, to help responsible lenders make more informed and robust decisions.Like TrueLayer, MogoPlus is a global expert in its field, which in this case is in bank transaction data insights for credit decisions. Data insights from MogoPlus are used across a range of verticals, use cases and customer journeys to improve customer experiences, reduce operational costs and manage risk.  MogoPlus will use CDR in Australia to ingest open banking data for categorisation, aggregation and structuring before passing through one of its product specific configurations to generate relevant insights.Working together, TrueLayer and MogoPlus are part of a new era of banking, where data – provided with the full consent of the account owner – is turned into meaningful data-derived insights to drive new use cases, unlocking greater business efficiency and increasing bottom line results. Think personalised mortgage offers and credit card or bank account applications that take minutes rather than days, and even removing the friction from business loan applications.

Mixing AI with powerful data

The next stage of open banking will be when two cutting edge concepts – AI and open banking – merge, to create insights that not only explain more about your customer but also begin to offer the power of prediction. Researchers at Deloitte picked this trend as long ago as 2019, when they said if companies want to truly embrace the potential of open banking, they will need to "become insight driven organisations and embed analysis, data and reasoning into their decision making processes". Companies that harness the power of AI and open banking data will not only create better experiences for their customers, but get ahead of competitors. For example, small business owners seeking a loan to grow their enterprise may not have to wait until the end-of-financial-year accounts to prove they have a flourishing venture. An AI algorithm could simply run an eye over open banking-derived data at any moment and affirm both the current state of affairs and the financial forecast for the year – all with more precision as decisions can be personalised, faster, and cheaper as you literally cut out the middle-man.   The concept of AI-backed open banking data insights is new to Australia, but it's one TrueLayer has been working with for six years in the UK and Europe. Companies like Olivia AI already use our Data API for access to rich, instant financial data. 

The old ways come with a price

These kinds of insights could be gained by using screen scraping, a process that asks a consumer to hand over their banking login password. Or even more manual – customers are still asked to download their bank statements, put them into a PDF and email them to their broker to upload into some banks' lending platforms.But it comes at a cost: screen scraping and manual uploads offer no oversight over how that financial data is used, where it is kept, and how it is shared. Bank statement feeds are expensive and general email is not secure.Nor does it offer a clean, single-API approach to analysing that data. This is where a CDR specialist like TrueLayer comes in. We connect with the banks – the Data Holders (DHs) – using our secure API and access only the information the end consumer has consented to share for a specific purpose. Our clients turn that data into insights which their customers can then use to make decisions.Before open banking, this process might have taken days or weeks, as data is organised, verified and sorted. Now, we're talking seconds, as APIs do the heavy lifting of data extraction and algorithmic engines do the rest. We're entering into an exciting new world, where the decisions made from data-derived insights will be faster, simpler and more precise than ever. Join us on the journey – get in touch.

About the author

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CEO – TrueLayer Australia & New Zealand
Brenton Charnley leads TrueLayer's Australia and New Zealand business, where he is responsible for operations, supporting our global partners to launch in Australia and onboarding new partners to integrate with the TrueLayer platform.

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