Are you subscribed to too many streaming services?
And how much do you actually spend on home delivery?
An emerging breed of AI-driven fintechs can tell you all of this and more, just by looking at your account and credit card statements.
It’s because of open bankthe consumer data rights (CDR) framework that gives you the power ask your bank to share your financial data with fintechs willing to help you analyze your expenses.
CDR is already used for purposes as diverse as avoid bill payment failures and COVID contact tracing – but with Australia’s open banking regime attracting new entrants like Israeli personal financial management (PFM) company Personetics, the possibilities are growing rapidly.
CDR is “a massive accelerator for our business” and “the most compelling reason why we want to double down in Australia,” said Mandeep Sandhu, Personetics Country Director for Australia.
Personetics, whose AI-powered software helps conventional banks operate more like data-driven neobanks, has sold its platform to more than 80 traditional banks, including Santander, UOB and Metro Bank.
With a venture capital war chest of $119 million ($85 million), it is now expanding to Australia through deals with MyStateBank and two other newly signed clients.
Personetics algorithms provide proactive advice on customers’ financial health, spending, and spending habits.
His auto-save features can determine when you have extra money in reserve and ask you to put it into a savings account or superannuation fund.
With the good permissionsthe platform can even transfer funds in your name.
Add other data sources and the possibilities quickly expand: the PFM platform could track your gas expenses, for example, and compare them with gas price tracking to see if you could save by filling up on days when prices are lower.
He could take an inventory of your streaming services and other subscriptionstracking your spending and, optionally, comparing it to your usage to let you know which services you can safely cancel.
The sky is the limit for “hyper-personalization” services that only become viable with access to real-time relevant data, Sandhu said.
“CDR is a major public service that will help grow the industry and help customers do business with an institution – and there is nothing like it in the world.”
Data drives industry innovation
Amid rising inflation, many workers are struggling to make ends meet and are changing their financial behavior accordingly.
A recent PwC investigation found that 65% of employees changed their spending behavior in the past 12 months, with 53% reducing the cost of essential items and 43% saving more than in the past.
As many as 87% of respondents said they wanted help making financial decisions.
This could see strong adoption of CDR-driven services that will facilitate the sharing of financial data – and will soon be extended to the energy sector to help consumers make more informed choices of service provider.
CDR will then extend to telecommunications, the government recently announced, with “open finance” – an ecosystem comprising the non-banking elements of the financial services industry, such as pension and insurance providers – to follow.
The Australian government’s sector-by-sector approach is “super smart”, according to Sandhu.
“Proactive sector-by-sector research allows you to understand how people are spending,” he explained.
“You can build a real profile around that – and, more importantly for you as a customer, you want control over that information and how you use it.”
Australian banks and fintechs have invested heavily in data tools to make them more responsive and flexible.
Judo Bank, for its part, recently implemented a major cloud-based CRM system within months, while Commonwealth Bank invested in open banking fintech Payble, and Bendigo and Adelaide Bank bought Melbourne-based fintech Feroci – all to deliver new data-driven insights.
Deeply-established Australian banks could suffer if they can’t keep up with fintechs, with Accenture to predict that easier bank switching could threaten 29% of banks’ traditional retail products – but increase revenue by 10% for successful institutions rethink their business models.
Comments are closed.