SocietyOne lays down the gauntlet to Australia's banking giants

Aussie banking giants have mostly refused to take part in a comprehensive credit reporting scheme

Australia's largest fintech lender has said it will share its customers' credit data, and has challenged big banks to do the same. 

Aussie fintech lender SocietyOne has signalled that it will share its customers’ credit history as part of a wider effort to build a fully-fledged comprehensive credit reporting (CCR) regime in Australia. The company will start sharing in November 2017.

The move is intended as a challenge to Australia's banking giants, which have mostly refused fintechs urgings to share their customers’ credit history.

Among the big four banks, National Australia Bank recently announced that it will start providing positive consumer credit data from February 2018 while the Commonwealth Bank has said it will do the same for its home loan customers before the end of 2018. It has not said when it will provide comprehensive credit data for the rest of its retail banking customers.

The two other major banks, ANZ and Westpac, have yet to indicate if, and when, they will participate in the CCR regime.

Reporting positive credit information, and making it available to other credit providers on a secure and confidential basis, allows lenders to consider the positive attributes of a consumer’s credit history when assessing an application for credit, not just negative information such as payment defaults, court judgements and the number of credit application enquiries.

Positive credit reporting will also include new information such as the date a credit account was opened or closed, the type of credit facility and the available credit limit, and importantly, the last 24 months repayment history.

The Government, and companies like SocietyOne, believe that through the sharing of this data customers will better understand their credit position and be able to use this information to get a better deal on a loan that is appropriate to their financial needs and ability to repay. This is responsible lending and will also make banks and lenders put their customers’ needs first.

Jason Yetton, SocietyOne’s CEO, said CCR would help Australians get a better deal.

“This will empower Australian consumers in a way they haven’t been previously and I applaud the Federal Government’s initiatives on CCR and open banking which have finally seen some of the big players in the banking industry pledge their support for a proper and positive credit reporting regime,” said Mr Yetton.

“It also means that when CCR comes into full force sometime next year, Australia will have finally caught up with the vast majority of developed and developing countries, including the UK and the US, where positive comprehensive credit reporting has been the norm for decades and has been shown to benefit consumers, providers and their economies as a whole.

Mr Yetton said that for this to occur, many more banks and financial services providers would need to get on board with CCR. When SocietyOne starts reporting from next month, the company will be just one of three consumer credit providers in Australia to make positive credit data available. Another 15 or so are understood to be participating in CCR in “private” mode, but to be fully effective it requires all the major banks and lenders to start contributing for CCR, he added.

“While we are seeing the traditional players taking steps in the right direction, there is still a sense that the industry is being dragged kicking and screaming to do what is best for all Australians,” said Mr Yetton.

“Since CCR is coming in its full glory, we should all get on board and do that now rather than have to wait for the Government to force everyone to act in their customers’ interest through legislation.”