Australians largely in the dark about Open Banking, Waave study reveals

Recent research findings by payments technology company Waave reveal that despite the introduction of the Consumer Data Right (CDR) legislation five years ago, a significant majority of Australians are still unfamiliar with the concept of Open Banking. Two thirds (68%) of the national survey's participants admitted to never having heard the term, while only a small fraction, one in ten, claimed profound knowledge on the subject.

The CDR, a game-changing legislation introduced in 2019, empowers consumers with safe data-sharing options, enabling them to control who has access to their data and for what duration. As the first use case of the CDR, Open Banking utilises consumer banking and spending data to aid access to pertinent financial products, such as more favourable mortgage rates, expedient Account-to-Account payments, and insightful data on spending habits.

Despite the low awareness level, Open Banking was seen as financially advantageous among those knowledgeable of the concept. Three in ten believed it to be safer than traditional banking options, close to half (45%) considered it as having the potential to enhance their financial status, while 43% thought it would contribute to a fairer payments and banking system. A concerning discovery, however, was that 40% of those who claimed knowledge of Open Banking were under the misconception that it would make their personal data publicly accessible.

"It is disturbing but unsurprising to encounter such low consumer awareness of Open Banking, given the dearth of consumer education and promotion," comments Ben Zyl, co-founder and CEO of Waave. He adds that this lack of awareness puts consumers at unnecessary cybersecurity risk and deprives them of the financial benefits of Open Banking.

Jill Berry, CEO of leading Australian Open Data intermediary Adatree, echoed Zyl's sentiment. She highlighted frustration "at the lack of communication around the benefits of CDR and Open Banking" and noted that "these findings should be a wake-up call for Treasury to implement the consumer communications campaign they've been promising for years."

Research revealed noticeable disparities in awareness of Open Banking between age and location groups, with men demonstrating better understanding than women. Younger Australian participants, particularly millennials, showed a higher knowledge level compared to other generations. Similarly, middle-income earners were significantly more aware than both lower and higher income households. Regionally, residents of WA and NSW reported more familiarity with Open Banking than those in VIC and QLD.

Zyl concluded: "Open Banking presents a vast opportunity for fairness in money matters. At Waave, we strive to facilitate access to Open Banking and account-to-account payments to allow businesses and consumers to utilise this technology with the utmost ease and security."

The February 2024 survey was conducted by YouGov with a diverse sample of 1,080 Australians aged 18 and over.