Yesterday, 1 July, marked the official launch of the Consumer Data Right (CDR), ushering in a new era of open banking in which consumers are able to use their data to their advantage to access more personalised financial products and services.
Individual customers can now request that their bank share their data for deposit and transaction accounts, as well as credit and debit cards. From 1 November this year, consumers will also be able to share their data relating to home loans, investment loans, personal loans and joint accounts.
The four major banks are already able to share their customers’ data upon request, with other ADIs set to join in over the coming year.
“The Consumer Data Right gives consumers control over information banks already collect about them. Importantly, from today, it allows consumers to share that data with other businesses, such as fintechs, that may be able to provide them more personalised services and competitive offers,” explained ACCC Commissioner Sarah Court.
“We are pleased that we have reached this significant milestone with the CDR going live, so consumers can now request their data…be shared securely in order to receive those offers – without all the time and energy that it would normally take for a consumer to do this on their own.”
The ACCC launched the Consumer Data Right Register & Accreditation Application Platform at the end of May which underpins the security and privacy protection for the CDR and is responsible for accrediting data recipients.
At launch, there are two accredited data recipients which have already completed the necessary steps to securely receive data, with a further 39 providers in the process to become accredited.
Rebecca Schot-Guppy, CEO of FinTech Australia, celebrated the official launch of the new system as “a step forward” for the fintech industry, but also acknowledged that the “work to see the policy’s full potential realised has only just begun”.
“What has been launched today is the first iteration of this policy and there is already key discussions in place to revise it, making it more accessible and cost effective for industry,” she explained.
“We would also urge government to consider a well-timed awareness campaign to help encourage consumer adoption of CDR-related services offered by the industry.”
According to Yanir Yakutiel, founder and CEO of alternative lender Lumi, the adoption of open banking “could not come fast enough”.
“The coronavirus pandemic showed us that the banks are simply too slow at distributing funds – to small businesses in particular – with fintechs providing a vital lifeline for thousands of businesses across the country,” he said.
“It would have been hugely beneficial to have this data made available at the start of the pandemic.
“Now, fintechs will be able to access the same rich data from customer current accounts, such as credit history, to make better decisions on who to lend to – and fewer bad loans will be a benefit to everybody.”
However, Yakutiel echoed a similar sentiment to Schot-Guppy in pushing for further progress beyond the significant step taken this week.
“There are some major policy changes at the federal level needed before we can truly say we are on a level playing field competing with banks and other overseas competition,” he said.