Open banking puts customers in control of their data

Since its Australian launch on 1 July 2020, the government-led open banking scheme – part of the wider Consumer Data Right (CDR) – has taken its first steps towards giving customers greater control over how their financial and banking data is accessed and used.

As the first accounting software provider in the country to be named an accredited data recipient at the “unrestricted level”, Intuit QuickBooks Australia understands how the scheme will empower small businesses and deliver value to accountants and advisers.

First and foremost, open banking aims to overcome many of the limitations businesses currently face when importing bank data into their accounting software, says Steve Kemp, Intuit Australia’s head of financial institutions partnerships for Australia and emerging markets. 

“Under the open banking regime, all customer bank accounts – loans, credit cards, etc. – will become available,” he says. 

Kemp explains that customers will be able to request the transfer of their financial banking data directly into their Intuit QuickBooks account, which will then appear instantly through application programming interfaces: a far more secure method than manually entering account information, or moving bits of paper (and passwords) between advisers. 

He adds: “Customers and their advisers will be getting access to the data they need to run their business, which will all be in real time – giving them richer insights and a more comprehensive picture of their business.”

Greater efficiency and control

Currently, less than 70 per cent of Intuit QuickBooks’s transactions are automatically reconciled through bank feeds, but with open banking, that number is expected to double. 

Finance teams will no longer need to upload statements, chase data from clients or complete the manual application process to set up bank feeds. This will create a huge time saving for businesses – estimated at about eight to 10 hours each week. 

“It will definitely support accountants to shift more of their focus into advisory services,” Kemp says.

With access to real-time data through QuickBooks’s dashboard, Kemp adds that businesses will gain better cash flow insights. 

“Through cash flow planning capability, which is AI [artificial intelligence] driven, customers will be able to look forward weeks and months into their business to do forecasting and see what their true cash position is going to be, so they don’t have any surprises when things don’t go to plan.”

Driving innovation

The open banking rollout is almost complete, with major and non-major authorised deposit-taking institutions having already met most milestones relating to the sharing of data and full data transfer expected by February 2022. 

In September 2021, Westpac joined NAB & Commonwealth Bank as the first of the “Big Four” banks to become accredited data recipients, meaning it will not only share its data, but also – with customer consent – be able to obtain CDR data and register its products with data holders.

Since recent amendments were made to CDR legislation, empowering consumers to share their data with “trusted professional advisers”, Kemp believes more providers will soon come on board as accredited data recipients. 

In doing so, they will be able to leverage competitors’ data to tailor products and services to their customers, which will lead to increased competition in the banking sector and, in turn, to greater innovation. 

“The whole purpose of consumer data originally was to provide customers with much greater control, but also to give them much greater ability to compare and find the best product and service for whatever their need is,” he says. 

“This will save them time and money and allow them to focus on the things that are most important to them.”

Intuit QuickBooks is your trusted partner to support you to adopt and adapt to all the emerging technologies and regulatory changes that will affect CPA members and their clients. We look forward to launching our Open Banking solution in early 2022 and enabling your clients with our suite of smarter business tools.