Banks continue to close branches in 2024
It’s been quiet in the Consumer Data Right over the last few weeks. Industry participants did meet at the Intersekt 2024 for more discussion on lenders and how the proposed changes to the rules faivour Australian Deposit Taking Institutions. In the meantime we have seem more banks closing their branches and focusing on digital.
Banks Closing Branches and Forcing Customers to Go Digital: Aussies React to Final Bankwest Closure
After nearly 130 years of serving Australians, Bankwest has officially closed its final metropolitan branch in Perth, signaling a major shift in the banking landscape. Bankwest, owned by Commonwealth Bank of Australia (CBA), has opted to transition fully to digital services, citing changing customer behavior and the increasing use of online banking. The closure has sparked significant outrage, especially among older Australians who are finding it difficult to adapt to the new digital reality.
Community Backlash Over Branch Closures
Customers who have been with Bankwest for decades have expressed their sadness and frustration at the closure of branches. Lyn, a 30-year customer, voiced her concerns: "It's very sad... How devastating for their community." In regions like Mandurah, a retirement and holiday area, the impact is particularly severe, with many older individuals struggling to adjust to online-only services.
Another Perth resident described the transition as "shocking customer service," highlighting the challenge for those who are not digitally savvy. With three-hour waits on the phone to resolve simple issues, many customers believe in-person banking would have made their experience smoother. "We need some face-to-face banking," another upset customer commented.
This sentiment isn’t isolated to Bankwest. Macquarie Bank also transitioned to a cashless, digital-only service earlier this year, leading to a similar outcry from customers who felt that the shift limited their access to basic banking services.
As banks move to digital platforms, the Consumer CDR becomes a key tool for empowering consumers in the new financial ecosystem.
However, while CDR provides more flexibility and control for tech-savvy customers, many seniors and rural residents feel left behind by the rapid shift to digital. Without face-to-face assistance, navigating these tools may be difficult, further exacerbating the digital divide.
Therefore, it’s very interesting that Australian banks don’t seem interested in using the CDR even as they continue the banking sector's trend of a digital-first approach.
The closure of Bankwest’s last metropolitan branch symbolizes this behavior; customers can access their data only via the bank's proper apps. As more banks close branches, switching will be difficult for customers.
Article link: Aussies devastated as final metro Bankwest branch closes today: 'Very sad'
Article link: Macquarie Bank goes cashless from today. Here's how it will affect customers
Athena Home Loans welcomes REA Group’s investment
Athena, a direct-to-customer digital lender, has entered into a relationship with REA, the owner of the Mortgage Choice brand. I believe this further demonstrates that the CDR has not been effective for non-bank lenders. Athena, who originally intended to take on the banks by offering a truly digital home loan, has now had to build relationships with mortgage brokers to continue to grow. Under the recently suggested changes to the CDR rules, Australian banks can use CDR data as they would if they collected the data. While non-bank lenders must continue to hold the data separately, making it very difficult for them to use it in securitised programmes.
REA Group has announced its acquisition of a 19.9% stake in Athena Home Loans, investing up to $62 million from existing cash reserves. The deal will see REA take two seats on Athena’s board, pending regulatory approval. This partnership builds on their strategic alliance formed in 2022, aimed at combining Athena’s innovative home loan offerings with REA’s Mortgage Choice distribution network.
In June 2023, REA and Athena launched the Mortgage Choice Freedom products, which achieved $1.2 billion in settlements for FY24. REA CEO Owen Wilson highlighted that this investment reinforces REA’s commitment to offering homebuyers more choices and a seamless property financing experience.
Athena CEO Nathan Walsh welcomed the deal, stating that it aligns with Athena’s mission to provide fair and transparent lending solutions. Athena is supported by a strong group of investors, including venture capitalists, super funds, and Macquarie.
The investment comes alongside Athena’s second RMBS issuance of 2024, raising $1 billion in debt funding. Athena has settled more than $8 billion in home loans to date.
Article link: Athena Home Loans welcomes REA Group’s investment
5 Data Privacy Laws in Australia You Need to Know About
The article, by Ashish Khaitan, outlines five key data privacy laws designed to protect personal information and ensure control over how data is managed:
Privacy Act 1988: This act governs how personal data is collected, stored, and used by organizations, emphasizing the importance of data security and providing individuals access to their information.
Notifiable Data Breaches (NDB) Scheme: This scheme, part of the Privacy Act, requires organizations to notify individuals and the OAIC in the event of a data breach that may cause harm.
Telecommunications Act 1997: This act regulates the privacy of telecommunications data, requiring companies to protect customer data and only disclose it with consent or under legal circumstances.
Consumer Data Right (CDR): Introduced in 2019, CDR gives consumers control over their data, starting with Open Banking and expanding to other sectors like energy. It allows consumers to share their data securely with accredited third parties.
Health Records and Information Privacy Act 2002 (HRIP Act): Specific to New South Wales, this act ensures the protection of health information and gives individuals rights over their health data.
Article link: 5 Data Privacy Laws in Australia You Need to Know About
Intersekt 2024
Intersekt is the largest gathering of Australian Fintechs, hubs, accelerators, policymakers, regulators, investors and advisors, devoted to examining, discussing and unlocking the potential of Australia’s Fintech market.
Claude Maroun moderated the panel on the Consumer Data Right.
During the session titled "Levelling Up the Consumer Data Right: Unlocking consumer lending through open banking," the panel acknowledged that lending is the CDR's most obvious use case. However, they also expressed concern that the current CDR regime, has failed to understand the customer journey and other responsibilities of a lender throughout the borrower lifecycle.
"Lending isn't just making an application for a loan," said panelist Ben Milsom from Plenti. "CDR only lets you do one part of it," he added.
Jodi Ross from Tiimely noted growing gaps in the rules, with exemptions for derived data for banks as data holders versus non-bank lenders who will enter the regime from 2025 onwards.
"Non-bank lenders have the same need," she said. "This should happen in advance of their compliance obligations and it would support the core competition goals. CDR is not a privacy regime!"
Gavin Leon from Commonwealth Bank commented that the "sector by sector" rollout is not aligned to consumers' lives. He noted that, from a UX perspective, the customer journey and "life moments" are important.
"When there are key life events, the data is not just in one sector," Gavin said.
"Success is good UX and safe data sharing. Consumers don't need to know it's CDR," Gavin added, while also expressing a wish for clarity on the foreshadowed screenscraping ban as well as the scope and timeline for the inclusion of non-bank lending.
Intersekt link: Intersekt 2024