In its third set of amendments to the Consumer Data Right (CDR) rules underpinning Australia’s open banking system, the ACCC failed to address two of the three concerns raised following the last round of adjustments. The repercussions in terms of the new system's uptake are serious; as put by illion general manager of consumer product, Richard Atkinson, “Open banking is not going to be very open if we don’t get this right soon.”
The most recent amendments did make additional provisions for increased consumer benefit, but overlooked the need to provide greater choice to customers about who they share their data with and, importantly, disregarded the introduction of new accreditation levels which would allow smaller players in the market – like brokers – to be able to benefit from open banking data.
“The goal of the CDR is to give customers a right to direct that their data be shared with others they trust, so that they can benefit from its value. To achieve this outcome, the rules framework must balance security and cost of accreditation against facilitated data sharing,” Atkinson said.
“We are six months away from all ADIs having to expose transactional data to the CDR, however the current rules still have a single model for accreditation of organisations to receive CDR data.”
Yet, given the insufficient changes delivered in the latest round of amendments, Atkinson believes much of the market will not be able to participate in open banking until “at least 2022”.
“In illion’s experience, the current model imposes a significant cost on an organisation to achieve accreditation. There is a clear and present danger that the benefit of CDR will not be realised as the barrier to access the data (in the form of accreditation) is too high, evidenced by the fact that there are only six data recipients accredited after six months – two of which are illion,” he said.
It has not been made clear if further amendments are planned to address the two critical areas left untouched in the latest adjustments to the rules.
Atkinson added, “Where it all leads now is the big unknown. The ACCC has addressed the easy question, but what about the other, more difficult questions?
“We know from the introduction of the UK’s open banking model that regulation was a big problem. The UK’s open banking system has been operational for two years now, but the legislation and rules haven’t provided a good foundation for it to be really successful.
“Let’s make sure we learn from their issues and get it right in Australia – aligned to the original goals of the Consumer Data Right and the Future Direction that the Government has articulated.”