Improving the efficiency of the open banking system

A report from the FinTech company Frollo revealed an improvement in data sharing through Australia’s Open Banking system.

Frollo operates an Open Banking platform that facilitates the transfer of consumer data shared by banks or neobanks, after user consent. The platform has made around 30 million API calls since the launch of Open Banking in 2020.

Tony Thrassis, Chief Information Officer of Frollo

Analysis of Frollo’s Open Banking Application Protocol Interface (API) performance reports revealed that data sharing speed is improving. In Q1 2022, 22 of the 45 data holders included in the analysis were able to share data in less than a second, compared to only 16 data holders in 2021.

In addition, the reliability of Open Banking participants has improved, with the proportion of banks passing API calls at a rate of 99% or higher increasing to 40% from 22% in 2021.

In April 2022, 72 Open Banking APIs holding data were connected to the Frollo platform. This is an increase from just 11 in July 2021, but only companies from which Frollo received a significant amount of data were included in the analysis.

Frollo Chief Information Officer Tony Thrassis said the data produced in the report was largely in line with expectations, but he noted that there are currently few Accredited Data Recipients (ADRs) making requests. of data.

“Overall response times for most banks are reasonable. It will suit use cases that will benefit consumers, but it’s always the case that more is better,” Thrassis said.

“But there are banks with little data like the new neobanks. What if they have billions of records, will it slow down? What will happen if they have access to 20 ADRs at the same time, will it slow down? Those are things we don’t know, so for now I’d say it’s pretty good, it’s kind of where you’d expect it to be.

Frollo also investigated the completeness of transaction account data shared by 11 data holders between December 2021 and February 2022. Selected data holders are those who shared the greatest amount of data with Frollo.

They studied 26 selected data properties. Overall, all data holders included in the analysis share 15 of the 26 data elements, which includes the mandatory data set. Thrassis said about 80% of banks also offer optional fields. On average, data holders shared 87% of the 26 data elements.

Of the data holders, St George Bank provided the most data, sharing an average of 96% of the 26 available. NAB shared the fewest data types, typically only sharing 69% of data types.

Speaking more broadly about the right to consumer data, which allows for the consensual exchange of data, Mr. Thrassis called on the government to educate people about the system so that more developers build software by taking advantage of available data.

“Frollo has made 30 million API calls. There are hardly any [other platforms] live, if there is, we take the essentials. Right now we have to do education. We would like the government to do more than just fact sheets,” Thrassis said.

“We think the way to really educate people is a bit like in the UK, where the government provides grants for use cases to be presented, so that companies can create a working product. It’s a better way to teach people than just fact sheets.

Furthermore, he added that he wanted some of the banking problems to be resolved before the CDR is extended to other sectors such as telecommunications, energy and finance. In particular, he noted that without Service Level Agreements (SLAs) in Open Banking, banks are not obligated to improve certain things in their systems.

“Under an SLA, we could create a ticket with an issue, say, medium, and they would get there in, say, eight hours. The ACCC reaches out to all participants and urges them to pass but [without an SLA], if the bank doesn’t have the capacity because they have an old system, then what can you do? said Mr. Thrassis.

Mr. Thrassis also said that an appropriate way to judge the success of CDR will be by how well the resulting products are adopted by consumers and not just the number of industries in which it has been deployed.

Going forward, Frollo will produce a report analyzing the details of the data it receives rather than just what type of data it is.

Financial Services and Digital Economy Minister Jane Hume said in February that Australians would begin to feel the “tangible benefits” of CDR from next year.

Do you know more? Contact James Riley by email.

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