‘Open banking’ is about to shake up the home loans market
Australia’s banking system will soon be playing by a different set of rules.
It’s called ‘open banking’, and it promises to significantly change the way we do home loans.
From February 2020, the big four banks will have to make it easy for borrowers to share their personal home loan data (and other banking data) with rival lenders. That’s important because:
- Borrowers will find it easier to compare offers and switch lenders
- Lenders will find it easier to lure borrowers with personalised offers
The federal government, which is driving the open banking reforms, hopes it will lead to increased competition, which could mean:
· Lower interest rates
- Lower fees
- More innovation
For now, open banking will apply only to ANZ, Commonwealth Bank, NAB and Westpac. In time, other financial institutions will have to adopt open banking as well.
The government also plans to gradually roll out this system to other sectors of the economy – energy will be second and telecommunications third.
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