Andrew Tierney says that credit bureaux can thrive if they re-think their pricing and embrace Open Banking Is the price right?
The Australian credit checking regime is facing a wake-up call. Open Banking and the availability of rel- atively cheap real-time statement data is set to test the viability of the business model that credit bureaux have used in Australia for some time. Unlike in the US and UK, in Austral- ia, individual credit searches have always been pricey. While you may get away with paying as little as 50 cents
in the US, or under a pound in the UK, the cost of a credit report here is typi- cally between 3 and 6 dollars. For the full cost of acquisition, this can rise to 10-15 dollars. This situation has prevailed for many years, but is unlikely to continue unchanged for much longer. The advent of Open Banking means that finance providers could soon get inexpensive statement data from a
consumer’s bank account at the touch of a button. For the first time, real- time access to a borrower’s account is possible. Unlike a credit score, which by its very nature is ‘historic’, Open Banking data is far less likely to present a false picture of someone’s financial status. It gives an up-to-the-minute insight into what is happening in a person’s life, right now. A very handy tool that is more fit-for- purpose when wanting to check issues
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16 | Metrics Monthly
October 2019 | UK Edition
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