ISCOVER
Broker adoption of open banking has doubled over the past year, with 32,000 Australians sharing data with their broker, according to a new Frollo report.
Open banking adoption in the broker channel has surged over the past year, with the third-party channel drastically reducing the time to request and receive client data, enabling faster applications.
The State of Open Banking 2025 report, released by open banking provider Frollo at NextGen’s mid-year celebration in Sydney on Thursday (21 August), has revealed that adoption of open banking information in the mortgage process is accelerating.
According to the report, broker usage of Frollo’s open banking platform has more than doubled over the past 12 months, with nearly 3,000 brokers onboarded – representing more than 13 per cent of the national broker population.
Consent requests for home loan applications have surged sevenfold, reaching more than 6,200 in July 2025. (CBA, Westpac, and NAB have all enabled open banking in NextGen’s ApplyOnline, with more lenders expected to follow).
According to the report, brokers who are granted client access to their open banking data through the Consumer Data Right (CDR) can now access a complete financial picture in just over seven minutes – enabling faster applications, fewer errors, and a stronger customer experience.
Brokers who have open banking integrated into their client relationship management (CRM) system are also seeing faster application times.
Aggregation group Connective, which designed a customer integration of Frollo’s open banking platform for its broker CRM to pull summaries and transactions directly into loan opportunities, revealed that its brokers are saving around 40 minutes per client by eliminating double-handling and manual data collection.
Daniel Oh, Connective’s group legal counsel, noted that brokers using open banking have seen “a huge reduction in document handling” and more accurate living expense assessments.
“It allows brokers to understand their customers better and process applications faster,” he said, adding that the regulated framework removes risks of fake payslips or manipulated statements.
Tony Carn, chief customer officer at NextGen, described the shift as transformative.
“It’s a generational game changer for the mortgage industry. Open banking helps brokers take a much more proactive role in helping people get fit for finance, removing administrative barriers and allowing more focus on meaningful customer relationships,” he said.
The chief executive of the Mortgage and Finance Association of Australia (MFAA), Anja Pannek, emphasised the broader client relationship benefits, stating: “Open banking is transforming the broker-to-client relationship. This is not about lodging the deal. This is how a broker develops and really strengthens and deepens the relationship they have with their client, and helps them transition to a world [that] is safer and more secure.”
Technical issues persist
However, despite continued uptake in the broker channel, the report highlighted that challenges persist in the open banking ecosystem.
The Frollo report found that nearly 30 per cent of consent authorisations fail during bank authentication, with some major banks recording failure rates above 31 per cent.
Out of more than 11,000 Frollo users who shared feedback, over 10,000 identified failed consent as the primary issue. Eighty-eight per cent of failures are due to login issues, one-time passcode problems, or technical errors.
Sixty-seven per cent of Frollo users had an unsuccessful attempt at authorising consent on their first time, with some trying as many as five times before giving up.
Other issues that have plagued the CDR regime include inaccurate information (with some lenders having been recently fined for providing inaccurate information).
However, the formal CDR reset is said to be “yielding results”, with Treasury leading consultations with stakeholders that have reportedly improved consumer consent experiences and streamlined processes.
Speaking of the issue, Naveen Ahluwalia, the executive, policy and legal at the MFAA, stated that the consent review (finalised earlier this year) had resulted in improvements, by simplifying and streamlining consents.
However, more needs to be done to improve the ecosystem and improve the quality of data. Some players have suggested that the government needs to ensure standards evolve to accelerate improvements.
Peter White AM, managing director at the Finance Brokers Association of Australasia (FBAA), added that education was key to improving uptake – and that all players in the lending space needed to help pitch in.
“Everybody needs to play their part. Whether it’s the lender or service supplier, the aggregator or the broker, everybody’s got to jump onto the boat and be a part of this, or [the CDR] won’t get the traction that it should,” he said.
The report suggests the next phase will focus on expanding use cases beyond mortgages, including wealth management, personal finance, and energy switching, alongside integration with AI-driven services.
Pannek said brokers have a key role to play: “Change can sometimes be hard, but really understand what’s on offer. Sometimes it’s just starting small. Which parts of your business can you look at and integrate open banking? Is that expense verification? Is that digital income verification? The technology is here, and importantly, the guardrails are here as well.”
Tony Thrassis, head of open banking markets and compliance at Frollo, concluded by saying that while there’s still work to be done, the direction is clear.
He suggested that the finance industry must collectively move from viewing the CDR as a burden to seeing it as a national asset, particularly as the next phase will focus on action initiation, agentic AI integration, and clearer government policy settings.
Thrassis said: “A more focused direction is taking shape. Two things are clear: there is much to be hopeful about, and there is still a lot of work to be done.”
You can find out more about open banking and how broker feedback is shaping ApplyOnline, in this recent In Focus podcast, sponsored by NextGen:
[Related: Open banking platform launches for brokers]
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