In November this year, open banking, data aggregation and analytics platform Yodlee, will turn sixteen in Australia. Yodlee launched on Aussie soil in November 2008, initially providing the white label Personal Financial Management application behind ANZ’s budgeting, financial management and investment planning tool – MoneyManager, and the landscape and Yodlee’s impact on Australia’s finance sector has evolved immeasurably ever since.
From an industry perspective, Australia’s fintech sector has grown to a sizeable $45 billion; 2017 saw the launch of the Royal Commission into the banking, superannuation and financial services industries – which sparked an overhaul of the finance sector, putting integrity and customer centricity at the heart of everything it did; and in July 2020, the Consumer Data Right (CDR), otherwise known as open banking, launched in Australia. The period has also witnessed the advent of disruptive financial technologies like personal financial management platforms (PFMs), cryptocurrencies, BNPL, alternative lenders and many more.
Yodlee’s own local footprint has evolved considerably. After launching as part of ANZ’s Money Manager, Yodlee has supported many key local industry players to develop new innovative tools that help Aussies better understand their finances. Its local product suite has grown to include flagship tools like Credit Accelerator, which leverages alternative lending data to create competitive offers, minimise risk, streamline the loan application process, and increase loan completion; as well as its fully accredited open banking User Interface solution FastLink 4, and Instant Account Verification which verifies financial accounts instantly.
Furthermore, Yodlee’s Machine Learning-powered Transactional Data Enrichment (TDE) product means consumers can receive a greater level of clarity into their financial transactions. TDE augments and refines financial transaction data by adding a simple description, merchant name, category, and geolocation in a contextualised manner based on learnings from millions of transactions.
In 2021, Yodlee perhaps achieved its most significant local milestone: becoming an Accredited Data Recipient and Intermediary under Australia’s Consumer Data Right (CDR).
From screen scraping to open banking
Part of Australia’s move towards an open banking landscape has meant shifting from more traditional, manual screen scraping practices to digitised, API-driven ones. Yodlee played a critical role in helping Australian fintechs accommodate that transition, by providing a hybrid model which offered both open banking and non-CDR data. This was vital for democratising access, as becoming CDR-accredited was a time-consuming and costly process – so smaller firms and start-ups could continue using non-CDR data with Yodlee in those early stages of open banking.
It then became possible for accredited providers like Yodlee to enable smaller fintechs to access CDR data without needing to become accredited data recipients themselves, which became a further democratiser of open banking. Yodlee’s uniquely global footprint and access to global data sets have been another enabler of startup growth, allowing Australian fintechs to expand into new markets and be informed when doing so.
Existing use cases and what’s to come
Since its inception in Australia, open banking has come a long way despite several roadblocks. Quality of data, slowness of adoption, cost of execution and cumbersome user experiences are all criticisms that have come its way. Its potential impact on fueling innovation and financial wellness, however, cannot be questioned and on August 15th, the CDR Action Initiation Bill officially passed in the Australian parliament, marking a major step in Australia’s commitment to its rollout and overcoming some of its teething problems.
To date, CDR has mainly influenced the finance and energy sectors but has garnered a plethora of exciting use cases. In the finance sector, Yodlee’s open banking technology has helped Personal Finance Management Platforms (PFMs) to provide new and personalised financial management tools from expansive, rich and real-time financial data streams, meaning Australians can better understand and manage their finances. Mortgage brokers and home builders are also using Yodlee’s CDR technology to enable Australians to better navigate interest rates, build up a deposit, and manage their finances to become a homeowner sooner.
It’s not just finance and financial wellness that open banking is influencing. It is gaining significant uplift in other sectors – including small businesses, quick service restaurants and franchises. Open banking is unlocking substantial opportunities for these organisations, including quicker, more transparent and tailored access to business loans; faster onboarding of customers; and improved customer experiences through richer data insights.
Just getting started
Yodlee’s sixteen years in Australia have witnessed major advancements in the nation’s finance sector, and the company has remained a cornerstone of the journey towards becoming a fully-fledged open banking ecosystem.
From becoming an Authorised Active Data Recipient and Intermediary under Australia’s Consumer Data Right (CDR) to supporting the innovation behind some of Australia’s leading finance companies – Yodlee’s impact has been far-reaching.
That said, with the CDR Action Initiation Bill only passing the Australian parliament in August and a lot of work still needing to be done for it to reach its full potential – Yodlee’s mission is to continue supporting Australia’s CDR journey and remain a significant cog for many years to come.
