REA Group to trial ‘financial passport’ for home buyers

NextGen.Net’s open banking fintech Frollo and REA Group, the digital business specialising in property, have announced a proof of concept enabling the fintech's open banking service to be used within the realestate.com.au ecosystem to help home buyers understand their borrowing capacity.

According to REA Group, the initial proof of concept is based around a structure that would see realestate.com.au users share their consumer data right (CDR) data with Frollo to generate a “financial passport”. 

The financial passport aims to give users an “in-depth view of their income, expenses, assets and liabilities”, and help them understand “what’s achievable much earlier in their home buying journey”. 

The purpose of the passport is to help consumers gain a better insight into their financial situation, which REA said was a “critical aspect of the home buying process”, particularly for lenders when approving a loan, but also to help consumers understand their potential borrowing power.

Once the CDR information is accessed by Frollo (which would be automatically deleted from the fintech’s platform after 24 hours), the passport can be downloaded as a report by the customer and then uploaded to their realestate.com.au account, for example, as a way to provide a faster reading of their actual financial position. 

REA Group also stated that each customer would be provided with a data-sharing dashboard, to manage or withdraw their consent, or to request Frollo to delete their data prior to the automatic deletion date.

REA Group’s general manager financial experiences Eloise Wall said that open banking provides an opportunity to simplify the home finance process for both consumers and lenders.

“Leveraging Frollo’s technology and experience as a leader in open banking allows us to continue on our mission to change the way people experience property,” she said. 

“Launching the first open banking use case in home buying on the REA platform will bring the benefits of open banking to many more property buyers.”

Frollo founder and chief executive Gareth Gumbley added that one of the biggest opportunities for open banking is to “help improve the financial lives of Australians” by “improving the home buying journey”. 

“REA Group is showing vision by being an early adopter and proving out how open banking data will enhance the consumer proposition,” Mr Gumbley added. 

New CDR Rules

This proof of concept comes as the Morrison government has announced amendments to the CDR Rules intended to “support increased participation in the CDR by businesses” and to “empower consumers to get the value of their data through a broad range of service offerings”.

These amendments include the establishment of new pathways for industry participation by: 

• Allowing CDR participants accredited by the ACCC to sponsor other parties to become accredited, or allow them to operate as their representative.
• Encouraging consumers to share their data with certain trusted professional advisers, including a financial adviser or a mortgage broker
• Enabling consumers to disclose limited data insights outside the CDR for a specific purpose if they choose, such as to verify their identity or bank account balance
• Simplifying the data sharing process for consumers who use joint accounts by enabling each joint account holder to consent to share data on the account from 1 July 2022

Speaking on the changes, CEO of the fintech industry body, FinTech Australia, Rebecca Schot-Guppy said that they “directly address the suggestions we have made to the government based on best practices around the world”.

“This is yet another step forward for the industry in seeing the CDR and open banking increase competition and lead to better consumer outcomes,” Ms Schot-Guppy added. 

“Despite the progress we have made so far, we can’t take our eye off the ball just yet. The framework still needs to be continually tweaked and improved.”

The decision follows the announcement from Beyond Bank that it has been the latest lender to be accepted as an accredited data recipient under the CDR, bringing the total number of accredited data recipients to 18. 

REA joins TCA

The proof of concept also comes in the wake of the confirmation that REA Group has joined the recently formed, 60-member Tech Council of Australia (TCA), an industry organisation intended to promote the economic benefits of Australia’s technology sector. 

REA Group CEO Owen Wilson said following the announcement on Monday (4 October) that REA Group is “excited to join the TCA and proud to support its goals of creating 1 million tech jobs by 2025 and contributing $250bn to the economy by 2030”. 

REA Group chief technology officer Chris Venter added that REA Group is looking forward to “working with the TCA to focus on initiatives that support the growth of, and investment in, Australia’s tech sector”. 

“Importantly we want to generate more tech jobs and pathways into them, while creating space for innovation and boosting the growth of the tech sector,” he added. 

Business lender and platform GetCapital was also confirmed as joining the TCA on Monday (4 October).

GetCapital founder and CEO Jamie Osborn said: “The Australian tech sector is full of potential and we’re pleased to be working with some of its best and brightest to realise that potential.”

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