Macquarie will launch its open banking platform – which makes it easier for consumers to share their financial data with third parties – in coming months, the company announced today.
The platform uses Application Programming Interface (API) technology so fintechs and other providers can more easily connect to customer data and offer new services.
Customers will have the option to securely connect personal banking data such as transactions and home loan balances, as well as business and wealth data, into third party providers, Macquarie said.
“Our customers have been telling us they want to securely connect their information into their favourite accounting software, budgeting app and other innovative services they’re interested in. Macquarie’s open platform will make this possible. We’ve built a highly personalised digital banking experience, so empowering our customers to securely manage how they want to use their own data is the logical next step,” said Ben Perham, head of personal banking in Macquarie’s banking and financial services group.
Customers will be able to manage access to their data in real-time through the Macquarie banking app. Authorised third party providers will have read only access to that customer’s data through a secure token which then reads the data from Macquarie’s systems, the bank said.
The platform removes the requirement for customers to reveal banking login details to third parties, meaning services can be accessed far more securely.
Any third party provider who meets Macquarie’s open platform standards and security criteria can connect. The providers can also access Macquarie’s devXchange, an open developer portal with a test sandbox.
The bank is currently seeking API developers to join its team.
“We’re looking forward to working with third party providers and developers to drive new and more personalised solutions for our customers that tie in seamlessly with daily life,” Perham added.
The bank will be “the first in Australia to give customers control over their everyday banking data and the power to securely manage how they want to share it,” Perham said.
Macquarie’s announcement follows a Productivity Commission report Data Availability and Use, released in March, which recommended individuals being given more control over the data collected about them and being able to transfer it between financial services providers more easily.
The Big Four banks submissions to the commission expressed support in principle but noted cost and security concerns.
In July the Government announced an independent review into an ‘Open Banking’ regime for Australia.
“Open Banking is about giving Australians greater access to their own banking data and has the potential to transform the way in which Australians interact with the banking system,” Treasurer Scott Morrison said at the time.
“Greater consumer access to their own banking data and data on banking products will allow consumers to seek out products that better suit their circumstances, saving them money and allowing them to better achieve their financial goals. It will also create further opportunities for innovative business models to drive greater competition in banking and contribute to productivity growth,” Morrison added.
The review will report to the Treasurer by the end of this year.
API or die?
In November last year a parliamentary committee scrutinising the operations of Australia’s Big Four banks called for the government to mandate the API-based sharing of the customer and small business data held by banks.
The Productivity Commission’s final report earlier this year stopped short of such measures, noting IT infrastructure costs and potential security and operational risks. The Australian Bankers’ Association said in its submission that the cost of building APIs would be ‘substantial’.
ANZ bank has made a limited number of APIs – unrelated to customer banking data – available via its developer hub. In December, NAB launched a developer portal with a limited number of APIs relating to NAB branch and ATM locations and NAB foreign exchange rates.
Payments giant Visa, meanwhile has published more than 40 APIs “for every payment need” on its developer platform. Financial institutions that fail to make their APIs openly available were “doomed” Visa’s ANZ head of product Rob Walls told Computerworld in September.
“APIs are being used by leading digital companies like Amazon and Google to transform consumer experiences, and we’re excited about the opportunities the technology will bring to financial services,” Perham added.