Open banking is the practice of sharing your financial data electronically, securely and with your explicit consent. The objective is to give you complete access to data that has been collected by banks and financial institutions under the Consumer Data Right established in 2017.
Open banking can speed up the home loan process by offering an automated process of getting all your required loan documents under one roof, instead of having to manually gather the information. The banks and lenders could easily look up information about your accounts, and assess if you qualify for a home loan and even give you recommendations on which loan would best suit your needs.
Besides faster loan processing, open banking can:
- Get you real-time quotes on interest rates and terms of your credit cards, home loans and other financial products as lenders will have all the information needed to provide you with an accurate quote.
- Improve your ability to compare and switch between products and services.
- Encourages competition between service providers, leading not only to better prices for customers but also more innovative and tailored products suited to their needs.
- Smaller lenders and fintech lenders will have all the data they need to compete toe to toe with the major banks, who currently hold all of this data.
Cheers,