Dear Financial Sector,
I don’t know how to put this more simply than; screen scraping for bank details is dead. It’s time to switch to Open Banking.
This has been a long time coming, and it shouldn’t come as a surprise to the fintech industry. Screen scraping, web connectivity, Digital Data Capture – whatever you want to call it, and as critical as we want to be with these services, so far it has served the market well.
Screen scraping paved the way for Open Banking
Pre-Open Banking and screen scraping, the ability to access data, the vital fuel of the financial industry, was impossible. The only concession was that the banks allowed consumers to download PDF versions of their bank statements.
With the adoption of technology and the physical transformation of money into a digital form, the need to access consumers’ financial data became increasingly important.
Companies specializing in accessing financial data, known as ‘aggregators’, sprang up to meet this need by providing API access to banking data via screen scraping. They were the pioneers of Open Banking. Since its inception, it has been the stock standard the financial industry has relied on to drive innovation.
Lenders figured that if they could access the data programmatically, they could significantly reduce the friction associated with a loan application by eliminating the need to request pay stubs and copies of bank statements from consumers. Not only would this help simplify loan applications, but they could also use this data for automated credit decisions. It gives them the edge to compete with the incumbents.
Similarly, other innovative uses of data came about through services such as raids that automate the transfer of money into savings or investment accounts, reduce fraud through account verification, and personal finance management services that helped consumers educate themselves about their spending.
But it’s time to make the switch
Screen scraping was a workaround, or at best a patch, to fix data accessibility issues. As a result, it is susceptible to the slightest disturbance from any change in the bank’s web portals, making access to that institution’s data unstable. The developers then rushed to reverse engineer the latest changes and figure out how to fix connectivity access.
Basiq knows all too well how that works. Since 2017, we have been struggling to support screen scraping services, continuously monitor the connectors and troubleshoot. Over time, we have learned the hard lessons and have continued to strengthen the resilience of our platform to minimize these disruptions.
One of the consequences of Covid was the rapid digitization of financial services in many segments, and unfortunately with it came an increase in online fraud. All this has forced the hands of the banks to step up their security game, especially in protecting consumers’ hard-earned funds.
Until mitigate potential vulnerabilities of fraudstersBanks have resorted to implementing advanced security measures such as multi-factor authentication when logging into the bank and tools that can distinguish between a bot and a human by tracking their keystrokes and mouse movements. As an engineer and consumer, I am very much in favor of this, but these protections have led to the gradual decline of screen scraping services.
Some banks have already taken these measures and others have signaled that changes are imminent. The potential of big banks implementing these controls would be catastrophic for the thousands of businesses that rely on scraping services to collect and use data. As an industry we play with fire, hoping it won’t happen to us, but the reality is it already has, and as an industry we have to move on.
However, the days of patchy connectivity are over. With the release of Consumer Data Right’s Open Banking, the Australian financial services company finally has an alternative.
Basiq has never been fixated on how we support access to data, but focused on ensuring reliable connections to help our customers innovate.
We launched one awareness campaign aimed at highlighting the current risk for businesses that rely on accessing customer banking data via screen scraping, and encouraging them to future-proof themselves by upgrading to Open Banking as soon as possible.
The future is here
We have often talked about Open Banking as a future state; ‘it’s coming’, ‘when it matures’… but the future is here and now. Either we continue to invest in a system that will continue to deteriorate, or in one that will only get better over time.
We hope our campaign will encourage the industry to move to Open Banking and adopt the proper controls expected of consumers in a modern technological environment.
It took time to make sure the guardrails were in place and there were enough participants to enter the system to make it usable, but CDR has moved on to the next phase and we’re seeing it in action. It finally benefits the people it was founded for; the consumer who creates the data.
It’s time for companies to start the transition to Open Banking. This will be no easy feat; CDR accreditation and access pathways, new API interfaces and data management requirements will force existing participants to rethink their approach.
We are strongly committed to working with Australian companies. We want to help accelerate their access to Open Banking and minimize the impact of the web connector decline. We want to make the transition as smooth as possible.
As a founder, Basiq’s direction has always been driven by helping businesses access reliable and high-quality banking data to enable the development of products that make finance easy for ordinary Australians.
But we can’t do it alone; companies must future-proof their own access to data via the CDR. The future is now, commit to Open Banking.
What you can do
To learn more about the changes impacting data access and the benefits of Open Banking, visit the campaign landing page.
There you will also find a number of educational and practical resources that we have gathered to help demystify and guide you on how to access CDR data.