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Lenders and aggregators are being urged to roll out open banking to brokers more quickly given moves to potentially ban screen scraping.
The Mortgage & Finance Association of Australia (MFAA) has called on the mortgage and finance broking industry to accelerate the transition to the Consumer Data Right (CDR).
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Brokers are currently able to access data shared by a consumer under the Consumer Data Right (CDR) through the ‘trusted adviser’ model. However, the roll-out of use cases has been limited in the broker space, with only one aggregator (Finsure) having made the technology available to its brokers and one major bank (CBA) having turned it on for brokers so far.
Given that the federal government is looking at whether it should regulate or ban screen scraping given the introduction of the CDR framework (which is believed to be a safer way for consumers to digitally share their data), the broker association has called on lenders and aggregators to hasten broker access to open banking data.
Anja Pannek, chief executive of the MFAA, explained: “We’ve been in regular discussion with Treasury this year, highlighting how extensively the mortgage broking industry relies on products that leverage screen scraping technology, such as BankStatements.com and CashDeck, to meet responsible lending and other regulatory requirements.
“What’s clear is that the federal government would like reliance on this technology to end and regulation of these tools is coming. With that in mind, all of industry needs to accelerate use of CDR for trusted advisers, including mortgage brokers, to obtain access to their clients’ financial data.”
She added that while uptake of CDR had been slow, the MFAA has observed that product development and integration have “accelerated” more recently.
“It’s now up to industry to get on with it,” she said.
In its recent submission to Treasury’s discussion paper on the policy and regulatory implications of screen scraping, the MFAA welcomed the decision to regulate, rather than ban, the practice of screen scraping. The MFAA also supported a transition between the two technologies in its submission.
“It’s important for our members, and their clients, that the collection of information is as thorough and frictionless as it can be. Our members have told us services that leverage screen scraping technology have been very helpful at facilitating this,” Ms Pannek said.
“It is our view that the CDR framework still requires some maturity before it can be an effective replacement for screen scraping, hence our strong recommendation for an orderly transition in our submission. Our call now to industry is to focus on accelerating uptake.”
She said that the MFAA will continue to “work closely” with Treasury and the federal government to highlight what is required for an orderly transition, including expansion of CDR into non-bank lending products through open finance.
“With heightened concerns around providing access to personal information following many significant data breaches experienced in Australia, we see brokers playing a critical role in explaining the security and ease of CDR and building their clients’ confidence in the CDR regime. We will be launching educational material to support our members in this area next year,” Ms Pannek concluded.
Brokers have also welcomed the push to open banking, with Sydney-based broker Aaron Christie-David from Atelier Wealth stating that enabling more brokers to access CDR data would “level the playing field for brokers” if they could have access to client’s accounts the same way proprietary channels do.
“The real winner here is the client, who doesn’t need to email sensitive data or share confidential documents, it can be all done with the advent of open banking,” he said.
“We use a few tools, namely BankStatements.com.au and we would be receptive to more technology platforms that make our clients and our lives easier from a data, privacy and cyber perspective.
“The only thing holding us back is greater access to additional tools and resources at this stage.”
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