Frollo urges collaboration to improve Australia's Open Banking data quality

Frollo, a notable open banking service provider in Australia, proposes a collaborative, use case-based strategy to augment data quality in Australia's Consumer Data Rights (CDR) framework. According to Tony Thrassis, Frollo's Head of Open Banking and Regulatory Affairs, this focus is to offer a data-backed perspective on open banking in an Australian context. Leveraging substantial experience in the field, Frollo is uniquely positioned to offer insights into the quality and accessibility of data within the CDR.

Thrassis stated, "We have delved into the availability of data imperative for a comprehensive, high-value Open Banking use case: money management." He contextualised the importance of the data-rich aspect of this particular use case, shedding light on its centrality in driving superior outcomes across various other systemic use cases, including, but not limited to, lending, customer onboarding, financial planning, and payments, all of which are dependent on a subset of the data required for thorough money management.

Frollo's recent analysis took an in-depth look at the quality of relevant data provided by Data Holders in a production environment, aiming to illuminate key areas that necessitate improvement. This analysis examined product information from seven significant Australian financial institutions: Commonwealth Bank, Westpac, NAB, ANZ, Bankwest, Macquarie, and ING. These banks collectively cater to the bulk of personal banking relationships in Australia.

Notably, six of the seven banks were consistently found to provide credit limits and minimum repayments for liabilities, with one bank trailing behind by only meeting the requirement 89% of the time. The same, albeit with an 82.5% provision rate, stood for the provision of loan repayment type information. Furthermore, five of the seven banks (71%) dutifully submitted interest rates for mortgage and personal loan products without issue, while two banks failed to specify the type of interest rate.

The second facet of the analysis scrutinised transaction data available via Open Banking across all participating banks for 210 million transactions from July 2023 to March 2024. In this part of the analysis, Frollo identified key areas in need of rectification, primarily concerning missing biller codes and names in 15% of BPAY transactions, 34% of fee-related transactions being incorrectly categorised as another transaction type, and 41% of banks excessively utilising the 'other' transaction type, labelling more than 20% of transactions as 'other'. Furthermore, transaction descriptions often lacked clarity and specific details.

Thrassis emphasised, "Reliable and comprehensive transaction data is the cornerstone of effective money management, enabling accurate categorisation, intelligent insights, and personalised recommendations."

Frollo's research accentuates the existing industry consensus that Open Banking avails a significantly richer batch of relevant data than screen scraping. This comparison, evaluating the availability of 65 crucial data fields for a comprehensive money management use case, showed that 95% of these data fields are accessible through Open Banking instead of merely 71% via screen scraping.

Thrassis added, "Data that is theoretically available via screen scraping often comes fraught with inconsistencies, making it challenging to formulate robust, scalable solutions."

Accordingly, Frollo urges the ACCC, the Data Standards Body, and industry participants to centre their efforts around high-value use cases to bolster the Open Banking ecosystem. Thrassis advocates for prioritising impactful use cases, working collaboratively to fill specific data gaps and enhance data quality, thereby giving practical direction to the realisation of Open Banking's promise of revolutionising the financial services landscape.