Only 0.3 per cent of bank customers are using an expensive federal government-backed scheme designed to make it easier for them to switch accounts and a report commissioned by major lenders suggests it risks turning into a white elephant.
The system “is not attracting customers, and not facilitating to innovate at pace, resulting in limited value created – at great costs for banks”, according to the review authored by Accenture and expected to be released on Wednesday. Other problems include a lack of consumer awareness, due to the absence of any marketing to promote it as a safer alternative to sharing data via a process known as “screen scraping”. This involves sharing banking credentials and is rife across the finance industry. And the processes for consenting to sharing data via the consumer data right is clunky, involving passwords and access codes.Applications have, so far, been developed by only a handful of start-ups.
These costs were in addition to spending by the government, some $300 million, including funding for the Australian Competition and Consumer Commission to regulate it.However, some users say the banks’ data, which was based on a survey of ABA members, underestimates true volumes as interest in the consumer data right continues to grow.
“Currently there are limited compelling use cases and low awareness which has hampered consumer adoption,” the Accenture analysis said.
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