September 2016 – Page 11 – Digital Finance Analytics (DFA) Blog

NAB Announces New Mobile Banking App

NAB says customers will have more control over how, when and where they use their cards, thanks to NAB’s new Mobile Banking App to be launched later this year.

The new App will include world-leading card transaction controls, making it easier for customers to conveniently and instantly self-manage their personal Visa debit and credit cards through their mobile device.

And, in an Australian first, NAB customers will be able to instantly use newly approved personal Visa credit cards, with an innovative digital contract feature in the new App not seen anywhere else in the world.

This means customers will be able to instantly use their new credit card through NAB Pay for contactless transactions less than $100, without having to wait for their physical card to arrive in the mail.

“This is a whole new platform for a new era of NAB mobile banking,” NAB Executive General Manager of Consumer Lending, Angus Gilfillan, said.

“Our new App will be fast and seamless, and has been designed to make banking as convenient and easy as possible for our customers.”

“We want to give our customers more control over their everyday banking, and our new App will help them to do this with the tap of a button.”

NAB announced a strategic partnership with Visa in November last year, which was designed to accelerate the delivery of payments innovation and product development for customers. Through this partnership, and utilising the capabilities Visa made available through its Visa Developer platform, NAB was able to enhance the card transaction control features in its new Mobile Banking App.

“We’re really pleased to have been able to open up our capabilities which is delivering speed to market and innovation,” Global Head of Visa Developer, Mark Jamison, said.

“By directly connecting Visa and NAB developers through the Visa Developer program, the NAB team was able to save around six months of development time.”

These card transaction control features will enable customers to select and modify when and how their Visa debit and credit cards can be used.

“Customers will be able to control what type of payments can be made through the App; for example, if you’ve provided a secondary card to a family member, you can choose “Don’t Allow” for online purchases on that card,” Mr Gilfillan said.

NAB’s new mobile banking experience will include a range of other features, including the ability for customers to place a temporary block on any card that may have been lost or stolen.

“NAB is absolutely focussed on improving the customer experience, and our new App will give customers more control of their cards so it better suits their individual needs,” Mr Gilfillan said.

The new App will also see improvements to existing features and functions in NAB’s current Mobile Banking App, and, with a new look and feel, it will be easier for customers to login, view account balances, and search past transactions.

An open pilot of the new App will commence soon for compatible Android devices, providing thousands of customers the opportunity to provide feedback. Customers who would like to participate in the pilot will be able to visit the Google Play Store and download the new App. Customers with iOS devices will also be piloting the App over coming weeks.

“Our customers have been and will continue to be extensively involved in the development of our new App because we are absolutely committed to delivering our customers the experience they want,” Mr Gilfillan said.

During the pilot and after the App is launched in full later this year, features on the App will be released in stages.

NAB will also this week launch its new NAB PayTag to customers, a sticker which can be attached to mobile devices to enable contactless payments linked to a customer’s Visa debit card.

“We’re always looking for opportunities to provide our customers with innovative products and services, features and functions, to help them do their banking easier and take control of their finances,” Mr Gilfillan said.

Westpac refunds $9.2 million after failing to waive bank account fees for eligible customers

ASIC says Westpac Banking Corporation (Westpac) has refunded approximately $9.2 million to 161,414 customers after it failed to waive fees on Westpac and St. George branded savings and transaction accounts over six years.

For customers aged under 21 years, Westpac previously relied on staff to manually apply the following fee waiver benefits:

a monthly service fee waiver for customers with a Westpac Choice transaction account; and

a withdrawal fee waiver for customers with a Westpac Reward Saver account.

However, between May 2007 and April 2013, 133,045 Westpac Choice and Westpac Reward Saver accounts were opened for some eligible customers without the relevant fee waivers being applied.

Westpac also discovered that there were 28,369 customers under the age of 18 who were eligible for a St. George Complete Freedom Student transaction account (which has no monthly service fee), but instead held a standard St. George transaction account which charged a monthly fee.

Westpac reported this matter to ASIC under its breach reporting obligations in the Corporations Act. ASIC acknowledges the cooperative approach taken by Westpac in resolving this matter.

Compensation and systems changes

Westpac has now provided refunds to affected customers. The refund payments included an additional amount reflecting interest.

In addition to compensating customers, Westpac is enhancing the account opening process for these Westpac and St. George products to ensure all new eligible customers receive the relevant fee waivers. This includes automated application of the relevant fee waivers based on the customer’s date of birth submitted during the application process. Westpac also monitors this activity to ensure the correct treatment of eligible accounts.

ASIC Deputy Chairman Peter Kell said, ‘Financial institutions that offer products with benefits such as fee waivers must have effective and robust systems in place to deliver the promised benefits to consumers.’

‘Businesses that rely on manual processes to apply waivers, discounts and other benefits should carefully consider how they manage the risks of processes not being followed, including having appropriate controls and procedures in place.’

RBA’s View, “After the Boom”

RBA Assistant Governor (Economic) Christopher Kent, spoke at the Bloomberg Breakfast today and gave a comprehensive, if myopic, summary of the current Australian economic position though the boom years, and into the current realignments. There was no discussion of the high household debt and the rapid rise in home prices. He concluded:

The pattern of adjustment of the Australian economy to the decline in the terms of trade and mining investment is generally consistent with what we had anticipated. However, the decline in the terms of trade was larger than expected. In response, there has been significant adjustment in a range of market ‘prices’ – including wages and the nominal exchange rate, although the exchange rate has depreciated a little less than otherwise given global developments. Monetary policy has also responded, with interest rates reduced to low levels. So while mining investment and nominal GDP growth have both been weaker than the forecasts of a few years ago and, more recently, inflation has been a bit weaker than expected, growth in the non-mining economy has picked up and been a bit better than earlier anticipated. Indeed, of late, real GDP growth has been a bit stronger and the unemployment rate a little lower than earlier forecast.

In many respects, the adjustment to the decline in mining investment and the terms of trade has proceeded relatively smoothly. The Australian economy has performed well compared to other advanced economies (Graph 11). Moreover, the drag on growth from declining mining investment is now waning and the terms of trade are forecast to remain around their current levels.

Graph 11

Of course our forecasts are subject to the usual range of uncertainty. But, given that commodity prices have increased substantially over the course of this year, some stability in the terms of trade from here on seems more plausible than it has for some time. Developments in China are likely to continue to have an important influence on commodity prices, given China’s role as both a major producer and consumer of many commodities. For this reason the outlook for the Chinese economy is a key source of uncertainty for the Australian economy.

If commodity prices were to stabilise around current levels, that would be a marked change from recent years. Also, the end of the fall in mining investment is coming into view. The abatement of those two substantial headwinds suggests that there is a reasonable prospect of sustaining growth in economic activity, which would support a further gradual decline in the unemployment rate. There is also a good prospect that the growth in wages and the rate of inflation will gradually lift over the period ahead. That’s what’s implied by our central forecasts.

The “New Normal” and US Rates

Recent volatile stock market movements are in reaction to the fear that central banks will begin to tighten monetary policy. Much attention is on the Federal Reserve. So, a significant speech from Fed Governor Lael Brainard is worth noting. She spoke at the Chicago Council on Global Affairs, Chicago, Illinois and outlined five factors in “the new normal”.

She concludes:

The five features of the current economic landscape that I have highlighted lean roughly in the same direction: In today’s new normal, the costs to the economy of greater-than-expected strength in demand are likely to be lower than the costs of significant unexpected weakness. In the case of unexpected strength, we have well-tried and tested tools and ample policy space in which to react. Moreover, because of Phillips curve flattening, the possibility of remaining labor market slack, the likely substantial response of the exchange rate and its depressing effect on inflation, the low neutral rate, and the fact that inflation expectations are well anchored to the upside, the response of inflation to unexpected strength in demand will likely be modest and gradual, requiring a correspondingly moderate policy response and implying relatively slight costs to the economy. In the face of an adverse shock, however, our conventional policy toolkit is more limited, and thus the risk of being unable to adequately respond to unexpected weakness is greater. The experience of the Japanese and euro-area economies suggest that prolonged weakness in demand is very difficult to correct, leading to economic costs that can be considerable.

This asymmetry in risk management in today’s new normal counsels prudence in the removal of policy accommodation. I believe this approach has served us well in recent months, helping to support continued gains in employment and progress on inflation. I look forward to assessing the evolution of the data in the months ahead for signs of further progress toward our goals, bearing in mind these considerations.

Watch her speech in full.

1. Inflation Has Been Undershooting, and the Phillips Curve Has Flattened
First, for the past several decades, policymakers relied on the empirical relationship between unemployment and inflation embodied in the Phillips curve as a key guidepost for monetary policy. The Phillips curve implied that as labor market slack diminished and the economy approached full employment, upward pressure on inflation would result. However, since 2012, inflation has tended to change relatively little–both absolutely and relative to earlier decades–as the unemployment rate has fallen considerably. At a time when the unemployment rate has fallen from 8.2 percent to 4.9 percent, inflation has undershot our 2 percent target now for 51 straight months. In other words, the Phillips curve appears to be flatter today than it was previously.

2. Labor Market Slack Has Been Greater than Anticipated
Second, and related, although we have seen important progress on employment, this improvement has been accompanied by evidence of greater slack than previously anticipated. This uncertainty about the true state of the economy suggests we should be open to the possibility of material further progress in the labor market. Indeed, with payroll employment growth averaging 180,000 per month this year, many observers would have expected the unemployment rate to drop noticeably rather than moving sideways, as it has done. It is true that today’s unemployment rate of 4.9 percent is only 0.1 percentage point from the median SEP participant’s estimate of the longer-run level of unemployment. However, the natural rate of unemployment is uncertain and can vary over time. Indeed, in the SEP, the central tendency of the projection for the longer-run natural rate of unemployment has come down significantly, from a range of 5.2 to 6.0 percent in June 2012 to 4.7 to 5.0 percent in June 2016–a reduction of 1/2 to 1 percentage point. We cannot rule out that estimates of the natural unemployment rate may move even lower.

3. Foreign Markets Matter, Especially because Financial Transmission is Strong
Third, disinflation pressure and weak demand from abroad will likely weigh on the U.S. outlook for some time, and fragility in global markets could again pose risks here at home. In Europe, recovery continues, but growth is slow and inflation is very low. Low growth and a flat yield curve are contributing to reduced profitability and a higher cost of equity financing for banks, which in turn could impair bank lending, one of the main transmission channels of monetary policy in the euro area’s bank-centric financial system. A low growth, low inflation environment also makes progress on fiscal sustainability difficult and leaves countries with high debt-to-gross domestic product (GDP) ratios vulnerable to adverse demand shocks. Against this backdrop, uncertainty about Britain’s future relationship with the European Union could damp business sentiment and investment in Europe.

4. The Neutral Rate Is Likely to Remain Very Low for Some Time
Fourth, perhaps most salient for monetary policy, it appears increasingly clear that the neutral rate of interest remains considerably and persistently lower than it was before the crisis. Over the current expansion, with a federal funds rate at, or near, zero and the additional support provided by asset purchases and reinvestment, GDP growth has averaged a very modest rate upward of 2 percent, and inflation has averaged only 1‑1/2 percent. Ten years ago, based on the underlying economic relationships that prevailed at the time, it would have seemed inconceivable that real activity and inflation would be so subdued given the stance of monetary policy. To reconcile these developments, it is difficult not to conclude that the current level of the federal funds rate is less accommodative today than it would have been 10 years ago. Put differently, the amount of aggregate demand associated with a given level of the interest rate is now much lower than before the crisis.

5. Policy Options Are Asymmetric
The four features just discussed that define the new normal make it likely that we will continue to grapple with a fifth new reality for some time: the ability of monetary policy to respond to shocks is asymmetric. With policy rates near the zero lower bound and likely to return there more frequently even if the economy only experiences shocks similar in magnitude to those experienced pre-crisis, due to the low level of the neutral rate, there is an asymmetry in the policy tools available to respond to adverse developments. Conventional changes in the federal funds rate, our most tested and best understood tool, cannot be used as readily to respond to downside shocks to aggregate demand as it can to upside shocks. While there are, of course, other policy options, these alternatives have constraints and uncertainties that are not present with conventional policy. From a risk-management perspective, therefore, the asymmetry in the conventional policy toolkit would lead me to expect policy to be tilted somewhat in favor of guarding against downside risks relative to preemptively raising rates to guard against upside risks.

How personalisation could be changing your identity online

From The Conversation.

Wherever you go online, someone is trying to personalise your web experience. Your preferences are pre-empted, your intentions and motivations predicted. That toaster you briefly glanced at three months ago keeps returning to haunt your browsing in tailored advertising sidebars. And it’s not a one-way street. In fact, the quite impersonal mechanics of some personalisation systems may not only influence how we see the world, but how we see ourselves.

It happens every day, to all of us while we’re online. Facebook’s News Feed attempts to deliver tailored content that “most interests” individual users. Amazon’s recommendation engine uses personal data tracking combined with other users’ browsing habits to suggest relevant products. Google customises search results, and much more: for example, personalisation app Google Now seeks to “give you the information you need throughout your day, before you even ask”. Such personalisation systems don’t just aim to provide relevance to users; through targeted marketing strategies, they also generate profit for many free-to-use web services.

Perhaps the best-known critique of this process is the “filter bubble” theory. Proposed by internet activist Eli Pariser, this theory suggests that personalisation can detrimentally affect web users’ experiences. Instead of being exposed to universal, diverse content, users are algorithmically delivered material that matches their pre-existing, self-affirming viewpoints. The filter bubble therefore poses a problem for democratic engagement: by restricting access to challenging and diverse points of view, users are unable to participate in collective and informed debate.

Attempts to find evidence of the filter bubble have produced mixed results. Some studies have shown that personalisation can indeed lead to a “myopic” view of a topic; other studies have found that in different contexts, personalisation can actually help users discover common and diverse content. My research suggests that personalisation does not just affect how we see the world, but how we view ourselves. What’s more, the influence of personalisation on our identities may not be due to filter bubbles of consumption, but because in some instances online personalisation is not very “personal” at all.

Data tracking and user pre-emption

To understand this, it is useful to consider how online personalisation is achieved. Although personalisation systems track our individual web movements, they are not designed to “know” or identify us as individuals. Instead, these systems collate users’ real-time movements and habits into mass data sets, and look for patterns and correlations between users’ movements. The found patterns and correlations are then translated back into identity categories that we might recognise (such as age, gender, language and interests) and that we might fit into. By looking for mass patterns in order to deliver personally relevant content, personalisation is in fact based on a rather impersonal process.

When the filter bubble theory first emerged in 2011, Pariser argued that one of the biggest problems with personalisation was that users did not know it was happening. Nowadays, despite objections to data tracking, many users are aware that they are being tracked in exchange for use of free services, and that this tracking is used for forms of personalisation. Far less clear, however, are the specifics of what is being personalised for us, how and when.
Data gathering: less complex than we might think. Anton Balazh/Shutterstock
Finding the ‘personal’

My research suggests that some users assume their experiences are being personalised to complex degrees. In an in-depth qualitative study of 36 web users, upon seeing advertising for weight loss products on Facebook some female users reported that they assumed that Facebook had profiled them as overweight or fitness-oriented. In fact, these weight loss ads were delivered generically to women aged 24-30. However, because users can be unaware of the impersonal nature of some personalisation systems, such targeted ads can have a detrimental impact on how these users view themselves: to put it crudely, they must be overweight, because Facebook tells them they are.

It’s not just targeted advertising that can have this impact: in an ethnographic and longitudinal study conducted of a handful of 18 and 19-year-old Google Now users, I found that some participants assumed the app was capable of personalisation to an extraordinarily complex extent. Users reported that they believed Google Now showed them stocks information because Google knew their parents were stockholders, or that Google (wrongly) pre-empted a “commute” to “work” because participants had once lied about being over school age on their YouTube accounts. It goes without saying that this small-scale study does not represent the engagements of all Google Now users: but it does suggest that for these individuals, the predictive promises of Google Now were almost infallible.
Are you an ideal user? EPA/DANIEL DEME
In fact, critiques of user-centred design suggest that the reality of Google’s inferences is much more impersonal: Google Now assumes that its “ideal user” does – or at least should – have an interest in stocks, and that all users are workers who commute. Such critiques highlight that it is these assumptions which largely structure Google’s personalisation framework (for example through the app’s adherence to predefined “card” categories such as “Sports”, which during my study only allowed users to ‘follow’ men’s rather than women’s UK football clubs). However, rather than questioning the app’s assumptions, my study suggests that participants placed themselves outside the expected norm: they trusted Google to tell them what their personal experiences should look like.

Though these might seem like extreme examples of impersonal algorithmic inference and user assumption, the fact that we cannot be sure what is being personalised, when or how are more common problems. To me, these user testimonies highlight that the tailoring of online content has implications beyond the fact that it might be detrimental for democracy. They suggest that unless we begin to understand that personalisation can at times operate via highly impersonal frameworks, we may be putting too much faith in personalisation to tell us how we should behave, and who we should be, rather than vice versa.

Author: Tanya Kant, Lecturer in Media and Cultural Studies, University of Sussex

Revealed – The Top-Ten Digital Suburbs Across Australia

We finish our review of the top digital suburbs across Australia by revealing the top ten post codes with the highest counts of households who are digitally inclined.

This is an interesting list because it consists of a wide spread of household segments, locations and states. This means that counter to the initial idea of a standardised “digital first” approach, effective digital strategy needs to be tailored and targetted to each group. Segmentation is still required.

The truth is that effective digital strategy still requires intimate knoweldge of the target groups. This is something which can be done more easily via digital channels, if the strategy is built correctly. However, many players are yet to harness the potential this offers, and to appreciate the full implications for those with a strong physical geographic footprint.

Read more about “digital first” in our report – The Quiet Revolution.

Business Lending Crunched – Investment Lending Apart

The final set of ABS data on finance for July 2016 includes all forms of lending, and does not tell a good story. Whilst investment housing lending grew, lending for productive business growth fell, again.

Here is the summary, having separated business lending for housing investment purposes, versus the rest. As normal we will focus on the trend data, which irons out some of the noise in the data, to see through to the underlying movements.

Lending for secured construction and purchase of dwellings fell 0.1%, or $20m, month on month, secured alterations rose just a little, personal finance rose 0.1% or $6m and overall commercial lending fell 1.75% or $671m compared with last month, and continues to fall.

Within the business or commercial flows, lending for investment property rose 1.1% or $127m, compared with last month, whilst lending for other commercial purposes fell 2% or $384m. Revolving commercial credit fell 5% down $416m.

So productive lending to business continues to fall, and overall lending is being supported by more investment housing. As a result, the proportion of business lending for investment housing rose again to 31% of commercial lending, whilst lending for other commercial purposes fell again to 48.2% of all commercial lending. These trends need to be reversed if we are to get real productive economic growth to kick in.

Finally, for completeness, here is the housing data, once again showing the ongoing rise in the proportion of investment housing lending, up 1.1% or $127m on last month, and up from 35.9% to 36.1% of total flows.

We think tighter macroprudential measures are overdue.

Preliminary auction clearance rates ease slightly to 76.4 per cent

CoreLogic says so far this week, 1,683 capital city auction results have been reported to CoreLogic, resulting in a preliminary auction clearance rate of 76.4 per cent across the combined capital cities.

This week, 2,026 total auctions were held across the capital cities, higher than last week, when 1,899 auctions were held, but remaining lower than one year ago when 2,654 capital city properties went under the hammer. Clearance rates are still tracking above 70 per cent, which they have done since the last week in July. This week’s preliminary clearance rate is down slightly from last week’s clearance rate of 77.1 per cent, which was the highest clearance rate recorded for the year to date. At the same time last year the clearance rate was 71.2 per cent.

ASIC puts insurers on notice to address serious failures

ASIC says they have reviewed the sale of add-on general insurance policies through car dealers and found that the market is failing consumers.

Our report released today (REP 492) finds that consumers are being sold expensive, poor value products; products that provide consumers very little to no benefit; and a sales environment with pressure selling, very high commissions and conflicts of interest.

These products are sold to consumers when they purchase a new or used car, and cover risks relating to the car itself or relating to the loan that the consumer takes out to purchase the car. Examples include consumer credit insurance and tyre and rim insurance.

ASIC Deputy Chairman Peter Kell said, ‘There are serious problems in this market that need to be immediately and comprehensively addressed by insurers.’

‘ASIC will be undertaking further work, including potential enforcement action, to ensure that this market delivers acceptable outcomes for consumers. We will also be looking at how insurers can refund consumers who have been sold inappropriate products,’ said Mr Kell.

For the three year period that we reviewed, we found that:

Consumers obtained little financial benefit from buying add-on insurance, with consumers paying $1.6 billion in premiums and receiving only $144 million in successful insurance claims – representing a very low claims payout of nine per cent. For some major add-on products, the benefit to consumers was even lower, with consumer credit insurance claims payouts representing just five cents for each dollar of premium

Car dealers earned $602 million in commissions – over four times more than consumers received in claims, with commissions paid to car dealers as high as 79 per cent

Payment for these insurance products is commonly packaged into the consumer’s car loan as a single upfront premium. This can substantially increase the cost of the product by increasing the loan amount and interest paid. Research shows that consumers are often unaware that they even have the policy when it is paid upfront as a single premium, and they may not get a premium refund if they repay their car loan early. Policies have been sold where it is impossible for the consumer to receive a claim payout that is greater than the cost of the insurance

The car sales environment inhibits good decision making about these products because of the conflicts of interest and pressure sales built into the distribution model. The consumer is focussed on purchasing a car and financing that purchase – not on the details of the complex insurance policy

Today’s report follows ASIC’s release of two reports in February this year about the sale of add-on life insurance by car dealers. ASIC stressed the need for insurers to address the high costs, poor value and poor claim outcomes of life insurance products sold this way.

ASIC is putting general insurers on notice that they need to improve consumer outcomes by making substantial changes to the pricing, design and sale of add-on insurance products or face additional regulatory action. The key commitments we are seeking from insurers are:

A significant reduction in the amount of commissions paid to anyone who sells an add-on insurance product through car dealers

A significant improvement in the value offered by these products, through substantial reductions in price and better product design and cover

A move away from single upfront premiums that are financed through the loan contract, given the adverse financial impact this has on consumers

Providing refunds to consumers who have been sold policies in circumstances that were unfair, such as where a policy has been sold to a consumer who was never eligible to claim under the policy

Insurers have notified ASIC that they intend to implement a 20 per cent cap on commissions, which is a positive step. Insurers in this market will be also providing ASIC with data on prices, premiums and claims on a regular basis so that we can monitor the impact of changes on consumers.

ASIC Deputy Chairman Peter Kell said, ‘While we welcome the initial steps taken by the insurers to improve the value of these products for consumers, there is still a long way to go. If industry does not deliver swift improvements for consumers, ASIC will take further action, including enforcement action where appropriate.’

ASIC’s review of these products is ongoing. ASIC will continue to work with insurers and consumer representatives to ensure that proposals for change deliver significantly improved value to consumers.

Visa to banks: Open APIs or be doomed

According to Computerworld, Financial institutions that fail to make their APIs openly available are “doomed”, says Visa’s ANZ head of product Rob Walls.

“Anyone that stands still in the current environment of technology change is doomed. We have to continue to evolve – because consumers are expecting it,” he said.

In February, the payments giant published more than 40 APIs “for every payment need” on its Visa Developer platform. The web portal also provides access to sandboxes, documentation and test data.

“We came to the view that there isn’t a single entity that can own all of the innovation in payments,” Walls said. “We’ve been operating as a payment network for almost 60 years. Previously our network was fairly closed, only those who were financial institutions or merchants or tech companies, that were authorised to access it, were able to engage with us.

“Over the past couple of years we’ve seen disruption in many industries, we’ve seen organisations change the way they’re using technology. With with millions of developers around the world today, which is forecast to grow, the value really is going to come from co-creation.”

Walls said that there were around 140 services within Visa that could be made available and there was a push internally to post more.

“There’s now a bit of internal competition around how quickly can I get my product or service into the API set. You want more people using it.”

APIs already published were selected based on client demand and the ease at which they could be securely extracted and made available for external consumption, Walls said.

Australian financial bodies have been cautious in making APIs openly available, citing cost and security concerns.

The situation is a source of frustration for local startups and fintech companies. In a submission to the Productivity Commission – currently conducting an inquiry into improving the availability and use of public and private sector data including open banking APIs – industry association Fintech Australia said failing to mandate open data would make Australia less competitive on the global stage.

“If Australia does not mandate an Open Financial Data model that is in line with global standards, or leaves banks to implement Open Banking APIs at their own pace, we will deny consumers the benefits of greater competition and improved financial services, and risk our banks becoming less agile and less competitive than their international peers,” the peak body wrote.

European regulation – the Payment Services Directive (PSD2) – requires that EU banks make it easier to share customer transaction and account data with third-party providers. Last year the UK government established the Open Banking Working Group with a remit to design a framework for an open API standard.

Open minds

Financial institutions were increasingly coming round to the potential of sharing APIs and drawing on the developer community, Walls said.

ANZ bank has made a limited number available via its Developer Hub and CIO Scott Collary announced in July that: “We want to be a more open bank”. NAB ran a hackathon at the end of last year, with monitored access to a number of its APIs.

“I think what’s really driving it is the fear of disruption. But that language is changing amongst financial institutions in Australia. Instead of being disrupted how can we work with the disruptors to improve the overall service?” Walls said

“The banks and Visa are of the view that innovation is able to come from anywhere and if it’s able to be integrated into my business in a fast, simple, viable way – then I don’t necessarily have to build it.”

Later this month, Aussie and Kiwi start-ups will pitch business ideas that make use of Visa services in a competition, ‘The Everywhere Initiative’.

Successful startups that can develop innovative applications using Visa APIs ‘to solve business challenges and bring new ideas to payments’ in three categories stand to win cash prizes and the chance to run a pilot with Visa.