One small lender reckons you can switch to them quickly – and at much lower rates thanks to new technology.
Open banking promises to be a game-changer in the way we can all better manage our money.
In essence, it’s a simpler and more streamlined way to share your banking data with approved lenders and financial technology companies, which could in turn help you find a better deal on your banking products and switch lenders more easily.
WHAT IS OPEN BANKING?
As technology develops, transactional banking is becoming almost exclusively online and ‘tap-and-go’ transactions are replacing cash. As open banking comes into play, you will be able to get a far clearer picture of how you spend and manage your money.
Thanks to online features, open banking will allow you to share your transaction history, account balances and income information with third parties that have been accredited by the Federal Government’s ACCC (Australian Competition and Consumer Commission).
These accredited and authorised organisations can be banks and lenders, financial technology companies who provide tools such as a budgeting app and down the track, potentially brokers like us. And you can control which party has access to your data and how they can use it.
This means that applying for a new account or signing up to a new credit card will be easier. Without open banking, you need to take the time to gather transaction history, evidence of income and ID information, and then submit it. With open banking you can send this information online in a few moments, potentially saving a significant amount of time and hassle.
It’s all about giving consumers control over their data, so you’ll be able to give consent to share information and then amend that consent when you want to. You’ll also be able to give more than one type of consent and provide, withdraw or amend these at any time.
A HOME LOAN APPLICATION GAME CHANGER.
When applying for a home loan, supplying some of the details on your spending can only be estimated at best. This can lead to inaccuracies and not allowing lenders to get a true picture of your finances.
With the rollout of open banking, it will mean you will be able to supply all this information with just a few clicks from all your accounts. This includes transaction accounts, term deposits, home loans, investment loans, personal loans, joint accounts, closed accounts, direct debits, credit cards and more. It’s comprehensive, accurate and up to date.
MAKING THE SWITCH.
Even if you find a loan that might be more appropriate for you, many people don’t make the switch because it feels too difficult. The thought of changing all their direct debits is so inconvenient they stay with their current lender, which could be costing them more.
Open banking embraces new technology and has the potential to make this a lot faster and hassle-free, making the idea of switching to a new loan much more appealing.
IS IT SAFE AND SECURE?
Open banking isn’t just about making it easier to share data, it’s about making it more secure. You don’t have to reveal your username and password to give access to your accounts, as can happen now.
Rest assured, the rules and regulations for open banking have been developed by the ACCC – the Government’s consumer and corruption watchdog – which requires a strict and comprehensive approval process to satisfy it that a bank or organisation has all the right security and privacy measures in place to safeguard your data.
While open banking might make it easier to find more appropriate options, comparing and understanding the pros and cons to decide which one is right for you is still tricky. At Origin Finance, we’re always here to make sure you can identify the loan that’s the most appropriate for you.
Open banking may be able to tell you about your finances right now, but it still can’t take into account your goals and what your life may look like in two, five or ten years’ time. Things like planning for a bigger family, downsizing as the kids move out, and growing and diversifying your property investments all need to be considered and factored into any decisions. And that’s where Origin Finance can help. If you want to have a chat regarding your individual circumstances, and how they influence your home loan situation, please get in touch.