“Silicon Valley is coming”. That’s what JP Morgan CEO Jamie Dimon wrote to shareholders in 2015. Dimon had been to the Valley and seen money pouring in to innovative start-ups, targeting the lending and payments space. Many other bankers have been since and come away with similar views.
Dimon et al saw by using big data to make decisions far quicker and more efficiently than existing financial institutions, these start-ups, collectively now known as FinTechs, were lean, hungry and coming to eat banks’ lunch.
Critically, in their quest to take a bite out of banking revenues, fintechs have always faced two difficult challenges: they don’t have access to bank data and they don’t have a banking license.
In Australia at least, those barriers were lowered with the release of the House of Representatives Standing Committee on Economics report into the four major banks.
The report, reflecting similar changes in the UK, makes a series of recommendations to bolster competition, dispute resolution and transparency in Australia’s banking sector.
Chief among these is the recommendation to force banks to expose customer data, product holdings, fees and transactions to customer-authorised third parties via industry-standard APIs (application programming interfaces) to be defined by the Australian Securities and Investment Commission.
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INTIX helps financial institutions share and exploit data to improve visibility and decision making.