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Could a financial passport make life easier for consumers?
When it comes to the benefits of open banking, a financial passport might only be the beginning.
Could a financial passport make life easier for consumers?
When it comes to the benefits of open banking, a financial passport might only be the beginning.
Local fintech Frollo is looking to shake up the equation when it comes to consumer finance in Australia through a new financial passport.
Modelled after its real-world counterpart, Frollo’s financial passport leverages Australia’s open banking ecosystem to bridge the information gap between borrowers and lenders in a more secure and efficient way than the alternative.
Frollo head of marketing Piet van den Boer told nestegg that the company’s financial passport is a way for consumers to get access to products and services using their financial information.
“The old way of doing things had consumers share their bank statements, and businesses had to manually comb through them to figure out their income and expenses, with lots of back and forth to get the right data and interpret it correctly,” he explained.
By comparison, Frollo’s digital-first alternative to this process is fully automated.
“We collect the data directly from the financial institution in seconds; our AI then automatically identifies income and spend categories, assets and liabilities,” Mr van den Boer said.
The big advantage of this approach is that it allows consumers to benefit from the additional transparency that the new open banking regime allows for without exposing them to unnecessary risk.
“The consumer decides what data to share, for which purpose and for how long. And they can always tell the business to delete that data,” he said.
Back in October, Frollo announced that it’d be working with the REA Group to help potential home buyers speed up the process by creating a financial passport that gave them an instant and in-depth view of their income, expenses, assets and liabilities.
This month, the company has announced that Volt will become the first lender to use the platform for the automatic and real-time assessments of a borrower’s financial situation.
In the long run, Mr van den Boer expects that the financial passport will provide a trusted and streamlined way for consumers to share their data with both consumers and businesses, reaping the benefits of the time and money saved.
“We see this version of our financial passport as the tip of the iceberg when it comes to open banking-enabled innovation,” he said.
While the financial passport concept is the open banking breakthrough that Frollo’s clientele are most interested in right now, Mr van den Boer expects identity verification and customer onboarding to become popular use cases in the future.
“Instead of having to manually fill in Telstra’s application form, what if I could just share my verified information with them using open banking?
“There are many more things that could be achieved by leveraging the data a bank has on a consumer.”
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