State of Open Banking 2024 - Trusted Advisers

Double opt-in for joint accounts threatens the promise of Open Banking

The Consumer Data Right (Open Banking) holds a big promise for Australians. But accessibility is key for it to deliver on this promise. This article outlines our thoughts on the current issue with joint accounts accessibility and how to solve it.

The Consumer Data Right (CDR) has been live in Australia for almost a year, and three things are crystal clear: 

  1. CDR provides a trusted framework for data sharing, better controls for consumers and more reliable, up to date financial information than alternative sources of account aggregation
  2. Consumers are excited about the experiences that can be built using Open Banking, and are more likely to use Open Banking than alternatives
  3. The current double opt-in model for joint account data sharing provides a sub-par, prohibitive user experience that ultimately benefits big incumbents and threatens the promise of Open Banking

The promise of Open Banking

The promise of the Consumer Data Right is a positive one: it is meant to bring about more competition, innovation and ultimately a better deal for consumers. By making it easier for consumers to safely and securely share their financial information, banks, fintechs and lenders can use this data to compete and provide them with innovative products and services.

A more streamlined mortgage application process, a more personalised banking experience and proactive outreach to vulnerable customers are just a few examples of what can be achieved using CDR data.

CDR can only deliver on this promise if the consumer experience isn’t significantly degraded when compared to the equivalent experience consumers have when interacting directly with their bank. 

And a year in, we can say that the user experience is seriously lacking, in particular for joint account holders.

The prohibitive double opt-in model

The Frollo app launched with the CDR on 1 July 2020. Since then we’ve made over 9 Million Open Banking API calls, which equates to over 97% of all Open Banking activity in Australia.

Since Frollo is the only app that can link accounts using both screen scraping and CDR, we are in the unique position of being able to compare the success rates.

One of the learnings from the last 12 months is that consumers are more comfortable sharing their financial account data when Open Banking is available as an option: more consumers consent to Frollo receiving their data.

Unfortunately the double opt-in model for joint account data sharing is anything but consumer friendly, it’s even prohibitive.

In the current implementation, joint account holders can’t share their financial data with any Data Recipient, unless both have previously elected to allow sharing of CDR data through the banks’ Joint Account Management System (JAMS). This limits the access joint account holders have to their own data.

Some users take days and a lot of effort to link their joint accounts, despite both account holders being motivated to share their data. For many people that means they ultimately just give up.

Gareth Gumbley, Founder and CEO (Frollo)

Our experience since joint accounts launched for CDR in November 2020 is that many users aren’t able to complete their joint account linking. The process on the Data Holder side is prohibitive, confusing and needlessly complicated. Some users take days, a lot of effort and help from our support team to link their accounts, despite both account holders being motivated to share their data. 

For many people this means they ultimately just give up.

Today, all joint account holders are able to access, download and share data directly from their bank’s digital platforms without the other party being aware – all banks support this, and for those consumers that use screen scraping, there is even less control and awareness.

A solution for joint accounts in Open Banking

A better solution for joint accounts in CDR, would be to give account holders the access to their accounts that they already have elsewhere. One joint account holders’ explicit consent should allow them to share their data using CDR.

This way, CDR experience will be brought on par with the bank’s digital platforms. With the added benefit that both account holders have complete visibility and control over the data that is shared.

It’s as simple as: “If you can send money, you can send data.”

It’s important to get this right

The impact of limited access and takeup of CDR in Australia cannot be overstated. One of the biggest opportunities for CDR to deliver value to Australian consumers is by bringing competition into the mortgage marketplace, often two people buying a house together. The ability to do this is significantly compromised with the double opt-in model, due to the significant amount of friction introduced into the process.

A survey we recently conducted shows that consumers are excited about the features Open Banking can enable, from showing all your accounts in one place, to personal finance management and streamlining loan applications. Most want their bank to provide them with these services, and 1 in 3 would consider switching banks to get access to an Open Banking feature.

Open Banking can drive innovation and competition, help consumers improve their finances and get a better deal. But only if it’s accessible, and with the current double opt-in model for joint accounts it’s not.

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