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Treasury has approved CDR rules for businesses, giving new rights to commercial brokers.
The federal government has taken another step in the roll-out of the Consumer Data Right (CDR) across various sectors, allowing businesses to share data with third parties.
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The CDR regime, currently live in the banking and energy sectors, enables consumers to grant accredited third parties access to their financial and energy data.
However, Treasury recently announced it was suspending the planned expansion of the CDR to additional sectors, in a bid to focus on the non-bank lending sector and address concerns that the CDR’s expansion might be happening too quickly.
Under the regime, individuals and businesses have the liberty to transfer their information to parties of their choosing, such as mortgage or finance brokers.
Major banks were the first to come under the CDR, followed by non-major banks and energy providers.
Despite some delays on the roll-out, the Assistant Treasurer and Minister for Financial Services, Stephen Jones, has signed into law operational enhancements to the CDR rules, to allow businesses to more quickly and safely share their CDR data with third parties.
Mr Jones said the move will “protect small businesses and their customers” by making sharing of data safer and easier with third parties.
The move also seeks to eliminate the widespread practice of ‘screen scraping’, wherein consumers and businesses share private data, such as login details, directly with third parties.
“The CDR channel provides a far safer alternative,” Mr Jones said.
Although this system speeds up processes, it has faced controversy due to the associated risks. In addition, an independent statutory review into CDR recommended that screen scraping should be banned wherever the CDR presents a viable alternative.
The review stated: “Data quality must improve for the CDR to realise its potential and provide a viable alternative to less secure practices such as screen scraping.”
In light of these recommendations, the government plans to consult stakeholders later this year to explore options for regulating screen scraping.
“Creating a safer channel for small businesses’ data also protects their customers, and this builds on the work the Government is doing to fight scams and fraud, including the establishment of a new and world-leading National Anti-Scam Centre,” Mr Jones said.
The updated rules, which come into effect on 1 December 2023, are expected to enhance data safety and facilitate more efficient access to advice for business consumers, promote flexibility, and free up businesses to invest in innovation and improve product offerings for consumers.
The government has allocated $88.8 million over two years from 2023–24 to ensure the continued operation of CDR in the banking, energy, and non-bank lending sectors.
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[Related: New open banking opens for brokers]
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