Australians will be able to save thousands of dollars in a “single click” as of 1 July, according to Finder analysis.
Also read: What can I claim on tax this year?
The new financial year will mean Australia’s four major banks, CommBank, NAB, Westpac and ANZ, will be required to share data with accredited recipients under the Consumer Data Right (CDR), or first step in the open data roll-out.
Under the Open Banking stage of the CDR roll-out, Australians will be able to direct banks to share data on what, how and where they’re spending their money with a service provider of choice.
Banks have been sharing this information since 1 July 2019, but the Wednesday update will mean the major banks will be legally required to pass on their data if a consumer asks them to do so.
For consumers, this means they will find it easier to compare financial products and potentially save thousands.
“Gone are the days of trawling through the internet for the best deal – with CDR it will all be in the palm of your hand,” Finder co-founder Fred Schebesta said.
“Finally, you’ll be able to see all of your banking information in one place and, better yet, you could see savings suggestions sent to your phone as a notification.”
Finder research found that Australian households could save $8,496 a year across home loans, health insurance, savings and credit cards if they switched providers.
But Finder also noted that only 3 per cent of homeowners switched their home loans in the last six months, despite record low rates. And, 8 million Australians have never switched their bank.
Additionally, around one quarter of Australians would allow their data to be shared with accredited third parties if it made it easier for them to score a deal.
“This is step one in giving Australians the power to save thousands of dollars with a single click,” Schebesta said.
“The Consumer Data Right will give the power back to the people.”
How does it roll out?
From 1 July, the big four banks will be required to share information on credit and debit cards and savings, deposits and transaction accounts.
Then, from 1 October 2020, all other banks will be required to share product reference data for these products. This data includes information on interest rates, features and fees. The four major banks were required to do this from July 2019.
In the UK, Open Banking helped consumers easily compare products and budget using apps like Cleo and Money Dashboard.
It’s also meant it’s been easier to apply for products without needing to compile documents and information.
But it’s not without downsides: there are concerns around data security. However, the Australian Competition and Consumer Commission has set a high standard for both banks and service providers.
Consumers are also concerned that greater transparency around spending habits might not paint them in the best light, and even make it harder to get a loan.
The next stage of CDR is energy, which will see energy companies required to share data on spending habits and products.