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The Treasury will soon release for consultation new Consumer Data Right rules that will enable consumers to give brokers access to their banking data.
In one of its first announcements since taking over the overarching leadership and responsibility for the Consumer Data Right (CDR) program from the Australian Competition and Consumer Commission (ACCC), the Treasury has announced that it is progressing with new, draft rules that will enable mortgage brokers to access CDR data.
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Currently, the rules do not permit the disclosure of CDR data by an accredited data recipient (ADR), such as a bank, to other parties that the consumer may wish to share their CDR data with (such as mortgage brokers).
Indeed, in their initial format, the CDR rules outline strict parameters by which consumer data can and cannot be shared – largely due to security/risk concerns.
However, following engagement with industry, it was noted that it was “critical” that a broad range of recipients should be able to engage in the Consumer Data Right scheme in order for it to “achieve the competition and innovation objectives of the regime, and for the CDR to support Australia’s digital economy”.
An informal consultation on the proposal was launched last year and the responses to this have been used to inform a draft set of CDR rules that would enable CDR data to be shared with specified ‘trusted advisers’.
These include:
- accountants;
- financial advisers and planners;
- lawyers;
- mortgage brokers; and
- tax practitioners (including BAS agents).
The proposed draft rules would therefore enable a person to “conveniently and securely share their banking data to a residential mortgage broker to help find them the best mortgage to purchase a property”.
As well as expanding who CDR data can be shared with, the new draft set of rules will also enable consumers to share “insights” obtained from their CDR data, which could help speed up loan processing.
The Treasury said the new draft rules would help verify a consumer’s identity, their account balance, income level and expenses in a more secure and efficient manner.
Treasury said the changes would “facilitate a safer and more efficient way to confirm details to support a loan assessment, minimising the need for an applicant to manually collect certain information and provide it to the credit provider, or even worse, provide their bank account password to the provider in order for the provider to ‘screen scrape’ that information”.
A third update to CDR rules will enable an Accredited Data Recipient under the CDR (such as a bank) to sponsor other parties (such as related fintechs) to become accredited, or allow their agents to participate in the system.
In an update, Treasury said: “The draft rules will be released soon for formal consultation…
“The intent of the rules is to provide a safe, convenient and efficient way for consumers to consent to an accredited person sharing their data with trusted advisers, support consumer convenience and reduce the costs of accreditation for smaller participants and start‑ups, without reducing the overall security and privacy protections of the regime.
“These proposed changes will unlock a range of data‑driven products and services that will help consumers, including small and medium-sized businesses, to benefit from their financial data, reducing time and effort in managing their financial affairs and providing a more secure framework to share their banking data with their trusted advisers,” it said.
The Data Standards Body within Treasury is expected to commence discussions with the CDR community on developing supporting standards prior to the release of the draft rules.
Find out more about the Consumer Data Right and what consumers think about giving brokers access at the Better Business Summit 2021. Places are limited so make sure you secure your place at the five-state event asap!
[Related: Consultation opens on CDR access for brokers]
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