SYDNEY – Further amendments to the Consumer Data Rights (CDR) rules are needed to help drive greater provider participation, according to Moneytree KK, the parent company of Australian open banking player Moneytree Financial Technology Pty Ltd.
The company has announced it will discontinue its current services in Australia from 15 January 2021 saying the current Consumer Data Right (CDR) requirements have constrained its ability to offer open banking services and this had been further exacerbated by the impact of COVID-19.
Mr Ross Sharrott, Chief Technology Officer and Executive Director, Australia, Moneytree, said the development of Australia's CDR is broadly heading in the right direction, however, there is an urgent need to encourage easier fintech participation.
"We saw from first hand experience that the current requirements demand significant financial and human resource investments. These costs are proving to be an enormous, if not an impossible, barrier to entry for most small to medium-sized potential CDR participants. Therefore the major incumbents remain unchallenged," said Mr Sharrott.
"Combined with the financial blow of COVID-19, the much delayed availability of a workable open banking framework has made the Australian market commercially non-viable for us at present."
Mr Sharrott noted only a few entities have thus far been accredited as CDR data recipients since the commencement of open banking in Australia. As well, the EY FinTech Australia Census 2020 shows fewer than half of Census respondents currently anticipate becoming CDR accredited data recipients*.
"The CDR has the potential to be a powerful tool to drive the post-COVID-19 economic recovery – and we would encourage lawmakers to hasten plans to foster greater participation, especially among fintechs and innovators," said Mr Sharrott.
Moneytree has been a leader in open banking and financial data aggregation & analysis since 2012. In June, Moneytree successfully switched 1.7m consumers in the Japan market from screen-scraping to APIs on behalf of 60+ data recipients, half of which were fintechs.
Since entering Australia in 2017, Mr Sharrott said Moneytree has invested significantly in the Australian market. The company has consistently engaged with industry and government to promote the development of a robust open banking system in Australia as the only player in the Australian market with experience operating within an open banking framework.
Mr Sharrott said it was clear from overseas experience that consumers were increasingly benefiting from open banking enabled services – particularly during the initial wave of the COVID-19 pandemic – but this was only made possible through a vibrant open banking ecosystem.
"The number of people in the UK using open banking functionality doubled in the six months to September 2020, with more than two million using the digital tools to personalise their banking services," said Mr Sharrott.
"Similar outcomes in Australia are possible but require a diverse range of open banking providers and the solutions they enable."
Moneytree LINK and the Moneytree PFM services will be discontinued in Australia from 15 January 2021. Mr Sharrott said the company will maintain a presence in Australia and will continue to explore commercial opportunities in the future.
* EY FinTech Australia Census 2020 October 2020 https://www.fintechaustralia.org.au/ey-census/
Moneytree is a fintech company founded in 2012 in Japan and started providing Moneytree, a PFM (Personal Finance Management) service which enables people to manage financial assets in a single place since 2013, contributing to better management of their personal finances, and helping to maintain financial wellbeing. In 2015, Moneytree launched Moneytree LINK, the financial data platform for businesses, and it has been recognized as the standard API in financial and accounting industries. In 2017, Moneytree entered the Australian market. Moneytree received investment by Salesforce.com, the venture capital arms of all three Japanese mega banks, SBI Investment, the venture capital arms of regional financial institutions and major international investment companies. Moneytree’s goal is to build a most trusted data platform.
Moneytree LINK is a data aggregation and portability platform for financial institutions. Moneytree LINK has more than 60 enterprise partners in Japan, including the Japanese megabanks and many of the top-rated regional banks, as well as the leading accounting service providers. In Australia, Salesforce and Rollit Wealth are Moneytree LINK’s first enterprise partners, with more to follow, helping Australian financial institutions prepare for the introduction of Open Banking with its strategic enterprise-wide Open Banking solution.
Moneytree Financial Technology Pty Ltd
CEO Paul Chapman
Capital: 2.56 Billion Yen including capital reserve as of April 2020
Founded: April 23, 2012
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Tel: 0416 236 293