Quite a lot has happened since 2020 started. As Australian banking leaders roll out initiatives to help consumers and small business owners cope with the fallout from the coronavirus, they also face an impending deadline: to make consumer data available by July this year.

Although open banking was announced two years ago, most Australian banks are still dragging their feet to comply. Forrester found that only 8% of purchase influencers in Australia’s financial services industry see open banking as core to their strategy. Plenty of work still needs to be done to make open banking a reality.

The good news is that there are a number of banks that are already experimenting with:

  • Internal APIs to improve organizational agility, efficiency, and effectiveness. National Australia Bank consolidated its internal APIs around a single platform that enabled internal developer teams to publish or consume APIs without a central team.
  • B2B APIs for partners and relationships outside the bank. Westpac’s card and bank account payment platform QuickStream has a host of B2B APIs — including APIs for payments, business account data segregation, and card and customer details — to integrate more deeply with partners.
  • Open APIs to expand market reach through openness and innovation. Macquarie Bank’s devExchange open platform provides account, transaction, and balance open APIs to let customers share their banking data with a third party without having to provide log-in details.

While incumbent banks experiment with APIs, fintech startups are focusing on building unique or innovative value propositions and solving specific banking and customer problems by partnering prolifically, using B2B APIs or open APIs to:

  • Help customers take control of their money. Digital bank 86 400 uses B2B APIs from its partner Accurassi, a data and technology startup, to allow customers to upload a PDF of their energy bills, compare energy providers, and identify and switch to an alternative energy provider that gives them a better deal.
  • Enable responsible lending. Financial aggregator startup Basiq created its open banking platform, categorizing its APIs into data services. It provides affordability APIs that give banks a more accurate view of a customer’s financial position during the loan application process.
  • Simplify access to cheaper services. Up, a digital bank that operates under Bendigo and Adelaide Bank’s ADI (authorized deposit-taking institution), uses TransferWise’s API to enable customers to make low-cost international transfers directly from their transaction accounts without having to leave Up’s app.

Forward-thinking banking leaders recognize that open banking is not a compliance or technology issue but is critical to driving competitive advantage. Open banking will drive a step change, and only those firms that embrace a customer-obsessed and collaborative culture will succeed. Moving from a business based on control to one based on influence and reciprocity, where you don’t own resources, requires a cultural reset.

Read my latest report, “The State Of Open Banking In Australia,” or set up an inquiry with me to find out more.