$4,200 banking secret millions of Australians are ignoring—but that's about to change

Imagine walking past $4,200 lying on the footpath every year. Sounds ridiculous, doesn't it? Yet that's essentially what millions of Australians are doing by not using a banking tool that's been available since 2020—and most people have never even heard of it.

Open Banking, part of Australia's Consumer Data Right framework, promises to revolutionise how we manage our money. But here's the catch: only 300,000 Australians were using it as of October 2024, despite being available to virtually everyone with a bank account.

Compare that to the UK, where 10 million consumers and small businesses regularly benefit from open banking technology as of July 2024, and it's clear something hasn't been working.

The good news? The government has acknowledged the problems and is rolling out major changes that could finally unlock Open Banking's potential.

When Open Banking actually works, the results are remarkable

Take the story of a 56-year-old Melbourne woman drowning in credit card debt. She had three different cards, $18,000 in outstanding debt, and was paying $700 per month in repayments at a crushing 20 per cent interest rate.

Using Open Banking through the WeMoney platform, she connected all three credit card accounts, which then searched for better consolidation loan options.

Within a single day—not the usual three weeks—she'd secured a personal loan at just 9.7 per cent interest, reducing her monthly repayments to $350.

The result? She saved $4,200 in her first year alone, money she used to take her two children on a dream holiday to Japan.

Why hasn't Open Banking taken off in Australia?

The numbers tell a sobering story. Australia has 90+ accredited data recipients, but user adoption has been painfully slow. Australia's CDR regime has been criticised for issues including quality of data, slowness of adoption, cost of execution and cumbersome user experiences.

It's a stark contrast to other countries. The UK's active open banking users reached 11.6 million in Q1 2025, growing 26 per cent year-on-year, while Brazil leads Latin America with over 9.8 million open banking users.

The complexity hasn't helped either. Open banking is laden with technological jargon and acronyms like 'application programming interfaces (APIs)' and 'transactional data enrichment (TDE)', which can be challenging to understand. In simple terms, it's the process of consumers sharing data in a more immediate, secure and streamlined way.

The government hits the reset button

Recognising these challenges, Assistant Treasurer Stephen Jones announced a CDR reset, which included reducing the issues driving costs and limiting take-up, changing consent and operational rules to streamline the consent process for consumers.

The changes are substantial and coming soon. In March 2025 the government announced key changes to take effect from mid-2026, including expanding CDR to include non-bank lending products, reducing the period of data to be held and shared from seven years to two, and ensuring buy now pay later (BNPL) products are covered.

Perhaps most exciting is Action Initiation, which allows a consumer to permit a service provider to initiate actions on their behalf. This became law in August 2024, but the real game-changer comes with implementation.

The revolution coming to your savings account

According to Frollo's State of Open Banking report in 2024, Action Initiation will be a game changer when third parties are allowed to action switching of savings accounts on a customer's behalf. Using Action Initiation, the customer could make the switch immediately after identifying a better product for them.

This matters more than you might think. A 2023 Deposit Inquiry by the ACCC found upwards of 7-in-10 customers do not meet the deposit criteria to attain the top interest rate every month. With automatic switching, you could be moved to better deals without lifting a finger.

What Open Banking can do for you right now

Even with current limitations, Open Banking offers several practical benefits:

• Debt consolidation: Like the Melbourne woman, you can find better loan rates to consolidate existing debts
• Account switching: Compare savings account rates across multiple banks instantly. If you have $40,000 in savings and find an account offering 1 per cent better interest, that's an extra $400 annually
• Budget management: Services like WeMoney can categorise every purchase automatically, helping you spot forgotten subscriptions or excessive spending patterns
• Credit assessment: When applying for loans or mortgages, Open Banking can speed up the approval process by providing instant access to your financial history
• Investment insights: Platforms can analyse your spending patterns to suggest appropriate investment opportunities

Security: Your biggest concern addressed

If you're worried about security—and you should be thoughtful about your financial data—Open Banking has robust protections built in. You'll never need to give your bank password to a third party.

If you choose to share your data, a one-time password will be sent via SMS for identification, and then your data is transmitted through a secure connection governed by strict ACCC terms.

The system uses two-factor authentication, and it's strictly regulated by the Australian Government, with only providers accredited by the ACCC able to offer services.

Which banks and services participate?

All major Australian banks are required to participate, including the Big Four (CBA, ANZ, Westpac, NAB) plus regional and smaller banks. As of October 2024, there were 99 banking and energy data holders in the CDR.

Popular services include:

• WeMoney: Budget tracking and debt consolidation
• ANZ Plus: Account aggregation from multiple banks
• NAB: Direct integration with third-party financial services
• Afterpay, Unloan: Credit assessment and lending decisions

Looking ahead: What's coming in 2026

The real transformation begins mid-2026 when the government's reset takes full effect. The changes will open opportunities for consumers to use CDR to find the best deals on more lending products while addressing the cost burden on the financial sector.

Australia's Consumer Data Right now extends beyond banking to energy and telecommunications, setting a model for cross-sector adoption, meaning you'll eventually manage all your essential services through similar platforms.

Taking the first step

Starting with Open Banking doesn't require diving in headfirst. Begin by checking which of your current banking apps already offer Open Banking features—you might be surprised to find some functionality already there.

If you're ready to explore further, visit the ACCC's Consumer Data Right website to see accredited providers. Start with something simple, like connecting a budgeting app to track your spending patterns.

Remember, 2025 is positioned as the year open banking really makes its mark, with increased consumer education, better user experiences, and improved access for startups and small businesses.