Fintech says Neobanks (or digital banks) are set to become the new way of banking.
Because Neobanks operate entirely online, they do not have the costs associated with running bank premises and paying staff, so they are more cost effective and can offer better interest rates.
The guidelines around how these organisations will operate are
still being formed, but the Office for the Information Commissioner
has released privacy safeguards as to how the new players and
established banks must obtain consent from customers before
acquiring and sharing their data – which includes a customer’s financial position.
Sector lobby group Fintech Australia co-founder and chief executive of Athena Home Loans Nathan Walsh says that while open banking will not apply to mortgage products until the end of the year, he sees home loans as the “main game” for the regime because sharing of data will help customers access better deals and refinance.
“Inertia is a $10 billion disease in the mortgage market,” he says.