How Action Initiation can succeed beyond the consumer and the banking industry’s wildest dreams
In welcome news to forward-looking consumers and companies, the bill allowing for Action Initiation passed the Senate on the 15th of August.
In short, these changes extend Open Banking consent capability from read access (being able to see data from a consumer’s account) to now include write access (being able to enact changes on a consumer’s account).
This means a consumer can provide their consent for a third-party company to make some types of changes to their bank or other customer accounts. One example of what’s possible under the new CDR would be if a third-party company knew a direct debit was about to put a consumer’s bank account into overdraft (read access) and organised for funds to be transferred from a separate account (write access) before an overdraft fee was charged.
Another example might be a third-party company identifying a better rate for a consumer’s energy bills and offering a one-click transfer.
The potential creative uses of this technology have barely been considered, let alone designed.
An Accenture report commissioned by the Australian Banking Association estimates the banking industry has spent more than $1.5 billion getting Open Banking to this point and will need to spend a further $3 billion to bring Action Initiation to life. These are eye-watering numbers given the banks have yet to identify any obvious pathways to return on investment.
But as my letter to the AFR’s editor a few days before the legislation passed outlines, the banking industry – and especially the Big 4 banks – sometimes needs to do their share of lifting beyond just what’s profitable.
So where can companies investing in Action Initiation look for inspiration while developing this new functionality?
Australia’s CDR pioneer, Frollo was focussed on making their consumer’s lives better by improving budgeting and money management. One reasons this business succeeded was because it looked to answer, ‘how can Open Banking help people?’ before trying to answer, ‘how Open Banking build revenue and profit?’.
Thankful to be supported by the founding CEO and CTO of Frollo, BillWill is equally focussed on how Open Banking can answer another important, albeit different consumer question.
How can Open Banking make the immediate weeks and months after the death of a loved one easier on those left behind?
We’ve already got one answer: using read access to build a more complete view of a consumer’s bills and subscriptions before their death means no surprises for next of kin trying to close or transfer critical accounts like gas or internet.
And we’ve made a great start on another: using write access to take the 50+ hours of administrative burden needed to undertake these closures or transfers off those experiencing some the toughest and most stressful times of their life.
And while Action Initiation would allow us to do this with greater efficiency, we’re not waiting for the technology to be built to deliver this needed service.
BillWill customers create instructions for each of their identified bills. So, when the time comes, BillWill can begin working with the many Australian billing companies we’ve been building relationships and processes with to ensure services aren’t unnecessarily cancelled and each account is closed or transferred to the right person at the right time.
This means that while Australians aren’t yet enjoying the benefits of write access, BillWill customers can leave their loved ones with the experience of closing or transferring an account in a few short clicks and without hours of tedious phone calls and emails.
We think that’s already a great start and can’t wait to see how other business begin to utilise Action Initiation to improve the lives of Australian consumers.
For more information on Action Initiation, Andrew Brien’s excellent and long-running CDR blog recaps the changes alongside media coverage and commentary.
Bob Tronson is BillWill’s Chief Operating Officer
