The mortgage and finance broking industry’s peak industry body has responded to the Assistant Treasurer’s call to regulate screen-scraping, urging for all of industry to accelerate transition to the Consumer Data Right (CDR) – Open Banking.
“We’ve been in regular discussion with Treasury this year, highlighting how extensively the mortgage broking industry relies on products that leverage screen-scraping technology, such as Bankstatements.com and Cashdeck, to meet responsible lending and other regulatory requirements,” explained Anja Pannek, CEO of the Mortgage & Finance Association of Australia (MFAA).
“What’s clear is that the Federal Government would like reliance on this technology to end and regulation of these tools is coming. With that in mind, all of industry needs to accelerate use of CDR for trusted advisers, including mortgage brokers, to obtain access to their clients’ financial data.”
The Government announced the proposed regulation of screen scraping in August this year, signalling a clear message according to Ms Pannek that mortgage broking is a perfect use case for CDR – Open Banking.
“Whilst uptake of CDR has been slow, our observations are that product development and integration has definitely accelerated more recently. It’s now up to industry to get on with it,” Ms Pannek commented.
The MFAA has participated in 11 submissions on CDR, across both Open Banking and Open Finance over the last five years.
In its recent submission to Treasury’s discussion paper on the policy and regulatory implications of screen scraping the MFAA welcomed the decision to regulate, rather than ban, the practice of screen-scraping. The MFAA also supported a transition between the two technologies in its submission.
“It’s important for our members, and their clients, that the collection of information is as thorough and frictionless as it can be. Our members have told us services that leverage screen scraping technology have been very helpful at facilitating this,” said Ms Pannek.
“It is our view that the CDR framework still requires some maturity before it can be an effective replacement for screen-scraping, hence our strong recommendation for an orderly transition in our submission. Our call now to industry is to focus on accelerating uptake,” said Ms Pannek.
The MFAA continues to work closely with Treasury and the Federal Government to highlight what is required for an orderly transition, including expansion of CDR into non-bank lending products through Open Finance.
As a result of advocacy by the MFAA, mortgage brokers are recognised as ‘trusted advisors’ under the CDR framework. Finance brokers assist their clients to obtain access to a range of finance options including business loans and vehicle finance. As such, and to extend the benefits of the CDR to their clients, the MFAA is actively pursuing ‘trusted advisor’ recognition for finance brokers.
A further key aspect of a successful transition to CDR is educating consumers on its purpose as a safe and reliable method of sharing data and having their mortgage broker assist them.
“With heightened concerns around providing access to personal information following many significant data breaches experienced in Australia, we see brokers playing a critical role in explaining the security and ease of CDR, and building their clients confidence in the CDR regime. We will be launching educational material to support our members in this area next year,” Ms Pannek concluded.
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