Founder & CEO,
“CDR will provide us with a true single view of a person’s data and enable us to empower them to make better day-to-day decisions.”
Parpera is an early-stage Australian fintech on a mission to help Australian businesses, freelancers and entrepreneurs improve the way they do business.
Parpera is developing a business banking alternative for businesses that will initially seek to provide digital wallet, card, payment and money management capabilities.
Guided by international precedents of similar success stories in foreign markets, Parpera’s business model will leverage Open Banking data to help its members setup, manage, and grow their businesses in the new economy. Their vision is already gaining traction with ~2,000 early waitlist signups ahead of their planned mid 2021 launch.
Why we wanted to talk to Daniel
Daniel Cannizzaro has a global management consulting background in financial services and has helped solve challenging strategy, operations, technology, and risk issues for a range of organisations, from early-stage ventures to large scale multinational corporations.
With experience working in the UK, Europe, North America and the Asia-Pacific region, he brings a global perspective to how we can use technology to make it easier for people to understand money and improve their financial wellbeing.
And now as the Founder of Parpera, Daniel has pulled together an all-star team with international experience working on businesses in established Open Banking regimes, particularly in the UK, so has a window to the future of what the Consumer Data Right might look like in Australia.
Can you tell us a bit more about Parpera?
Our purpose is to improve the economic prosperity of people, communities and societies, globally. To achieve this, we’re building an ecosystem of fair and transparent products and services to help people set up, grow and manage their business in the new economy.
Existing business propositions tend to be quite siloed in their focus, with traditional banks primarily focused on lending, and tax and accounting solutions focused on tax and regulatory reporting requirements; there aren’t many existing tools to really support businesses in managing their business holistically.
We interviewed and surveyed more than 500 businesses to better understand their needs and the challenges they face. We found that Australians specifically want a better solution that makes it easier and faster to receive money from their customers; maintain positive cash flow and manage expenses, tax and reporting obligations; and access support, products and services, personalised to their business and needs.
Targeting freelancers, sole traders and entrepreneurs, we’re initially looking to develop a solution that will provide digital wallet, card, payment and money management capabilities which we’ll make available on a paid subscription basis.
Initially we see ourselves as starting out as a product-based business, but as we build trust and better understand our members’ needs, we’ll transition into a platform-based ecosystem, focused on helping people confidently make decisions about their business. To achieve this, we need to access, analyse, and present data in an efficient, effective, and actionable way.
How will you use CDR to achieve your vision?
Initially, we’ll seek to leverage a CDR accredited provider, rather than be accredited ourselves, to access CDR. We hope that within 24 months, other aspects of CDR – such as write access – will be available to us, which will enable deeper integration into member data to deliver better member outcomes.
In the long-term, what will be really interesting is the ability to aggregate disparate sources of financial and non-financial data to form a hyper-personalised view of our member, but in the immediate term we see three key areas where CDR will have an impact on what we are seeking to build:
- Better actionable insights – into income and expense cash flows and being able to present an aggregate view of transactional data across personal and business accounts. This will provide us with a true single view of a person’s data and enable us to empower them to make better day-to-day decisions;
- Tailored support and offers – We’re seeking to build a marketplace offering around our proposition and will use the insights gleaned from CDR to deliver a more tailored experience. CDR presents us with an opportunity to personalise the support we provide and the products and services we recommend based on their spending behaviours; and
- Funding – CDR presents the opportunity to aggregate data from disparate data sources to develop alternative funding decisioning models to provide people with access to funding, who previously may not have been eligible due to an inability to “see” a true view of their funding worthiness.
What’s your biggest challenge in achieving this?
Open Banking in the UK has recently started to become mainstream, but it took a lot longer than expected. We’re expecting that the adoption curve here will be at least 12-24 months. It really requires the big banks – who bank the largest share of the population – to make their data available, within their mandated timelines and to a sufficient level of quality, before you’ll really see Open Banking gain traction.
This will also be key in making the data available for fintechs and other faster moving market participants to deliver on the innovative use cases we need to deliver people with real value and better outcomes.
Further, the education piece will be critical in building consumer awareness, trust, and comfort in consenting to data sharing.
There are many CDR use cases that can benefit people, however the ability to deliver on them is still some way off. In the same way that people don’t really care about whether your proposition uses Artificial Intelligence or Machine Learning, they don’t really care about it using CDR.
What people really care about is using your proposition to achieve their target outcomes or “jobs-to-be-done”. People don’t care how they achieve their desired outcomes, so whether its Open Banking, AI or machine learning, it’s really about using the tools and data available to us to deliver better outcomes.
At the moment there is a segment of the population that loves the idea of insights and what they can do with their money, but there’s another segment who can see a graph but don’t know what to do with it.
There need to be more market participants onboard and a greater emphasis on financial education and awareness for that to start to happen. And in terms of innovation, the write access piece will be critical to seeing the true benefits.
What do you expect the impact of CDR will be in the next 3 to 5 years?
The best quote I’ve heard is that, ‘We often underestimate how long it will take to achieve the level of adoption we need for it to be successful and overestimate the time it will take to really ramp up.’
In the first 12 months I’d expect it to be around having a clearer, single view of our members and being able to capture that data more efficiently. But ultimately, I don’t think it will be until Open Banking evolves to full write access and read capability that we will be able to realise its true value and deliver better outcomes.