Lenders shun screen scraping as open banking takes off

As more lenders begin to share and receive consumer data right (CDR) data under the open banking regime, screen scraping is increasingly being left by the wayside.

Speaking at NextGen’s sunset drinks and discussion event at its North Sydney office last week, Paul Franklin, the executive general manager for the consumer data right at the Australian Competition and Consumer Commission (ACCC), noted that the group had observed decisions being taken by some data recipients to migrate customers from screen scraping to CDR.

“The same data recipients have reported that consumer take up of CDR is now substantially more successful than screen scraping,” Mr Franklin said.

Noting recent data breaches and hacks impacting even large businesses in Australia (such as Optus and MediBank), Mr Franklin said that a “heightened awareness” of cyber attacks would make it seem “unlikely that consumers will continue to be willing to share their data through less secure means, like screen scraping or emailing unprotected documents”.

“CDR offers consumers a very secure way to share their data when they choose to,” he said.

“There’s certainly good reason for optimism that the new ubiquitous availability of data and an increasing number of data recipients [using it] is leading to strong growth in consumer adoption.”

Indeed, according to open banking fintech Frollo (a NextGen-owned company), 20 more banks have disabled screen scraping in its eponymous money mangement app with the CDR data now the default option for any provider using the app.

After initially removing screen scraping for ANZ, CBA, NAB, and Westpac in October, the fintech said it was now pushing ahead by making open banking the only option for users to link their accounts with 20 more banks, including Macquarie Bank, St.George, Beyond Bank and P&N Bank.

Frollo’s chief customer officer, Simon Docherty, suggested that open banking data was “superior” to screen scraping data capture.

Mr Doherty said: “In the two and a half years we’ve been live with open banking, it has progressively improved: Better coverage, improved reliability and richer data. We’re now at a point where in many cases, open banking is a superior alternative to other ways of sharing financial information. 

“Recent high-profile breaches in telco and insurance have brought security and privacy in data sharing top of mind for many consumers,” flagging that open banking provides “a more secure, privacy-focused way to share financial data that gives control of data to the customer, so it makes sense for us to make open banking the default and phase out screen-scraping where possible”.

“It’s exciting to see that the market is finally moving to open banking,” he added.

As well as providing more security, NextGen revealed that CDR data was also helping accelerate completion rates when it came to home loans.

NextGen’s chief customer officer, Tony Carn, told delegates last week that completion rates in loan applications were higher when using open banking data, revealing that around 50 per cent of mortgages utilising screen scraping were completed, whereas in CDR the completion rates for consumers were climbing past 70 per cent. 

“So I think it just unlocks so many factors going forward: safety, security, reliability, and customer trust,” he said.

[Related: Open banking first movers reveal CDR benefits]