Life Will Be Seamlessly Awesome
Updated: Nov 7, 2019
Yes, it’s a weird title for a blog post - my Dad was an English teacher and would squirm at this lazily constructed articulation. But I strongly believe business mentality, evolving technology, consumer sentiment and now, legislation could well make my life seamlessly awesome. Specifically when it comes to the needlessly boring shit, like finding the cheapest electricity deal, finding a life insurance policy that doesn’t line a brokers pocket for the next lazy 20 years or getting 20 motor insurance quotes – and being none the wiser about which would be the best value and fit. If I could have this service done for me by simply consenting to share some data about myself then my life would be better - I’d have more time, I wouldn’t be getting ripped off and life could be seamlessly awesome...
"I’d have more time, I wouldn’t be getting ripped off and life could be seamlessly awesome."
This is not what we have today. Certain businesses have enjoyed years of unbridled profits at the expense of consumers who have been too lazy, too busy or just too confused about how to get better deals for essential household/life expenses. This includes insurers, energy retailers, telecommunication companies, comparison businesses, brokers and of course, our super-profitable banks.
The Australian government is looking to correct the ways of the past through new legislation. This was only enacted as a reaction to an angry public sentiment created through the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Government needed to be pro-active and the first ‘Consumer Data Rights’ legislation was drafted as a result. This legislation starts with the banks but then extends to energy, telco and likely insurance, by which time it would be hoped that all consumer businesses will be adopting an open data policy and mindset.
Before we delve into what CDR (Consumer Data Rights) is and how it may work, it’s worth reminding ourselves of some pretty poor consumer experiences that exist today.
‘Compare, Select, Save’ they say on iSelect’s website – a well-known Australian comparison site.
So, I jump on their website and entered some details about my energy account referencing my latest energy bill. I should note I am over-familiar with energy bills but I’d say 90% of people would get confused at this point.
After entering my name, email and mobile phone number, I am presented with around six options of estimated costs (not a particularly thorough snapshot of the 40 odd retailers in my area).
These estimated offers also don’t give me an idea of what I would save by switching unless I manually compare it to my recent bill. As I mentioned before, energy bills and plans can be so bloody confusing, so can I really trust the data I entered is correct? As such, I decide that I am not confident in what I have been presented with so leave the site. Also, I know they are in court with the ACCC so trust levels are low on the ‘Compare’ part.
I did this search a few days ago and so far have received a call every day from their Melbourne call centre (which I have no intention of answering), I also got a random text from another company spruiking energy deals by 11 am. Wake up guys! We have Artificial Intelligence driving cars autonomously, pizzas delivered via drones to doorsteps and you think that by hounding me relentlessly with telesales agents, you will get your big fat commission? No way Jose! Better and easier solutions are coming.
I would hazard a guess, that in a couple of years you would get the same reaction justifying this business model to a group of millennial's as you would trying to explain how pagers worked in the '90s. Just dumbfound blank faces to something so alien.
So, back to the not so distant future to make this awful experience now seamlessly awesome:
I could just give consent to my bank (where my bills are paid from) to act on my behalf to get better value/fitted products such as energy;
I wouldn’t need to find my bill, the bank gets it on my behalf;
The bank would provide me with a simple prompt in their banking app to say that I can save $422 a year if I switch to a different plan and provider (this is the average saving from NSW’s Energy Switch service);
With a simple acknowledgement of consent in the bank app, the bank would switch me over without any phone calls;
The bank would then demonstrates to me in their app how much I am saving month to month (reinforcing my earlier informed decision);
The bank would then continue to check the full market each month (or quarter) when a new bill arrives;
I am always looked after (with a well-matched deal) without having to find my bills or be hassled with phone calls;
And all this would happen without a big fat commission changing hands. Meaning I, the consumer gets better value and the retailer can operate its business without making sales at a loss.
All the current pain and inconvenience will be a distant memory once the Consumer Data Rights Legislation has worked it’s magical way through various industries. With CDR, the government is sprinkling magic fairy dust on a group of industries that have enjoyed many years of healthy profits at the expense of the consumer.
Ultimately it should make businesses more efficient and customers happier, which usually results in businesses making more profit. Time will tell but if CDR is executed and adopted properly it really should be a win for all parties involved.
If we look at CDR, Open Banking is the first cab off the rank. But this first round of open banking is not going to provide anything revolutionary to the consumer, other than easily share my big bank’s transaction data through yet another personal finance tool.
CDR will start getting sexy when I can get help making real financial decisions such as finding and switching a mortgage, moving my credit card debt in a few minutes, knowing if solar is well suited to my home or knowing if I am well set up for my new Tesla.
CDR creates a trusted data exchange mechanism, enabling my data to be shared with a third party to help me make informed choices. It will lead to better profiling and understanding of me, the consumer (think Netflix knowing what content to serve me and keeping me happy and paying my subscriptions). My profile should also be ported with me if I switch, so the new energy retailer knows I have a 6kw solar system, a four person household, a stay at home worker, would prefer to buy green energy and am planning to buy an electric vehicle in 2022. Only then will I be fully benefiting from the new paradigm of open data.
CDR will create a new type of competition (not just price related), energy retailers will compete to ‘better know and understand’ the consumer. I expect to see many more subscription-style engagements around energy, electric vehicles, and insurances which will benefit from many new sources of data. By knowing their customer, a retailer can then regularly engage with the consumer in a meaningful and interesting way. I believe energy and insurance are two such industries that will suddenly become relevant and interesting through data-driven subscription services. Importantly, these subscription plans will be priced in very simple terms with no nasty surprises.
Can CDR re-invent consumer behaviours with some currently very boring industries? We’ll find out in the not too distant future.
Ross Sharman is the Co-Founder of Accurassi and an advocate for renewable energy and consumer power.