iscover 
According to open banking fintech Frollo’s State of Open Banking 2026 report, which uses Frollo and parent company NextGen’s open banking data, active authorisations reached 1,347,328 in June 2026, while consent volumes have grown 4.83 times in two years “with no sign of plateau.”
Of those consents, 120,000 were completed with a mortgage broker.
Meanwhile, applications using open banking through NextGen grew 234 per cent over FY2025–26, with 10.1 per cent of loans submitted through NextGen’s ApplyOnline using open banking.
Friction in consent journey
Despite the growth in open banking use, Frollo’s report found that the consent process remains the biggest point of friction, finding that abandonment rates have remained broadly flat for two years.
Across three of the largest banks examined, around two in three abandoned consents occur in the first two steps at the bank, when consumers identify themselves and complete authentication, such as entering a one-time passcode.
Commonwealth Bank of Australia (CBA) recorded 278,553 abandoned consents in FY25–26, with 38.8 per cent occurring during pre-authentication, after customers had identified themselves to the bank.
At Macquarie Bank, 44.3 per cent of abandoned consents occurred during pre-authentication, while ANZ recorded 57.9 per cent at the pre-identification stage, after consumers had been redirected to the bank but before they had identified themselves.
The report said the differences highlighted how “the consent experience isn’t standardised, and that confuses consumers."
Indeed, brokers speaking to Broker Daily said they had seen reluctance among clients to use a technology they didn’t fully understand.
“My use has been limited,” said Peter Liu, a practising mortgage broker and co-founder of AutoCalc.
“In my experience, many clients would rather provide their bank statements than complete the authorisation process.
“That has limited its impact on my day-to-day work so far. I do see it becoming more familiar and more widely accepted over time.
“A clear explanation of what clients are authorising and how their information will be used would help.”
Similarly, Kit Johnson, an Aussie broker in Forest Lake, said he’d seen customer hesitancy as the key hurdle.
“Banks and governments have spent years telling people to protect their banking details, so being asked to authorise access to financial data can feel counterintuitive.”
Open banking could also have applications beyond streamlining lending, should uptake become more universal.
In August, at the request of all four major banks, a Senate select committee recommended the inclusion of Australian Tax Office data in the Consumer Data Right (CDR), arguing that the ability to “accurately assess income levels provided in loan applications would improve lending integrity.”
Reliability not scaling with demand
Alongside consent, the report also identified reliability as another challenge, particularly as open banking use grows.
Server-side errors across all data holders increased 355 per cent in FY25–26, compared with a 125 per cent increase in API invocations, meaning errors are rising faster than the volume of data requests.
Of the 15 largest data holders, 10 saw server-side errors rise, with the largest increases recorded at Westpac, St. George, Macquarie and National Australia Bank (NAB).
The report said the trend indicated that the infrastructure supporting open banking had "not scaled proportionally" with demand.
Kellie Crocker, partner at Townsville-based RLA Finance, said many of her clients had been put off by a lack of understanding of the technology, compounded by a series of unsuccessful interactions.
“Clients can get frustrated and can’t understand why they ‘can’t just do it the old way’,” she said.
“The premise that it makes it faster with direct data flow, provide more accurate servicing calculations quicker and reduce fraud risk is all well and good, if it actually works every time.”
Brokers put open banking to work
The report identified the broker channel as an area of growth for the technology, describing it as “central to open banking’s progress”.
According to NextGen data cited in Frollo’s report, up to 60 per cent of brokers at Connective and Mortgage Choice now use open banking regularly, with the technology featuring in 35 per cent of mortgage applications submitted through NextGen.
Both aggregators reached this level of adoption within six to eight months.
The report also highlighted the time savings for brokers, with one Mortgage Choice office handling around 40 deals a week estimating that open banking saves at least an hour per deal on financial data collection alone.
At that volume, the report said, the time saved was equivalent to the capacity of one full-time employee.
Paolo Llave, senior finance broker at Berti Financial Group, told Broker Daily that the value of open banking went beyond the time saved by brokers.
“I try to use open banking wherever possible because it helps me get a clearer picture of a client’s financial position early in the process,” he said.
“It makes it easier to identify existing commitments and understand their spending, reducing the chance of surprises further into the application.
"The ability to get a clearer picture of a client’s financial position earlier in the process could also help brokers make more informed lending recommendations."
Small business remains a challenge
While consumer uptake has remained on a strong trajectory, the report found that issues with the nominated representative process were creating barriers for small-business adoption.
The process allows someone to share data on behalf of a business, but the report found it remained manual and inconsistent between banks.
Verifier, a financial data sharing company and contributor to the report, flagged drop-out rates of 50 to 60 per cent for business consumers using the Consumer Data Right (CDR), compared with just 3 per cent for its consumer lending applications.
Lisa Schutz, founder and CEO of Verifier, said that the process needed further streamlining if it was to appeal effectively to SMEs.
“We’re finding CDR fantastic. It’s working really well for Verifier and its consumer lending customers, we just need the same for business consumers,” she said.
Policy changes could unlock further growth
The report identified three policy changes that could generate an additional $1.2 billion a year for the Australian economy by 2035, according to modelling commissioned by member association FinTech Australia from Lateral Economics.
These included not proceeding with the a proposed de minimis exemption for smaller banks, introducing a new third-party disclosure consent and streamlining nominated representative arrangements for businesses.
Currently, non-banks are in the process of being incorporated into the CDR, although early data from open banking fintech Stryd has revealed a stark contrast between total market participation and usable product intelligence – as was also seen during the bank rollout – with missing data fields affecting the initial rollout.
The report noted that NextGen is already seeing strong loan lodgement volumes through non-bank lenders such as MA Money, with further growth expected.
Frollo said it did not support allowing authorised deposit-taking institutions with less than $5 billion in total resident assets to exit the CDR, a change that would affect around 55 institutions.
It argued: “Reducing coverage would create a more fragmented system, with less consumer data available through the CDR. It would also give the market a reason to keep relying on screen scraping, a less secure way to obtain consumer data.”
Tony Thrassis, head of open banking markets and compliance at Frollo, said: “What’s needed now is a shared focus on the friction points we already know: a smoother consent journey, reliable infrastructure at every bank, and policy settings that let data flow to where consumers and businesses need it.
“With industry and government working together, I’m confident the year ahead can be one of Open Banking’s strongest yet.”
[Related: The good, bad, and ugly of non-banks in open banking]
Want to see more stories from trusted news sources?Make Broker Daily a preferred news source on Google.
