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The government has revealed a set of changes to improve the Consumer Data Right and boost consumer take-up.
Assistant Treasurer and Minister for Financial Services, Stephen Jones MP, has announced new changes to the Consumer Data Right (CDR), one of the core parts of the open banking regime.
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Earlier this year, the government announced that CDR was going to be ‘reset’ given low consumer take-up and high costs for businesses. Following the ‘reset’, it undertook a consultation with stakeholders on the design papers relating to its Consent Review and Operational Enhancements, which included a range of opportunities to amend the CDR rules so that they better support the consumer experience while maintaining key consumer protections, and ensure they are fit for purpose and support the CDR’s policy objectives.
To improve the consumer experience, the Albanese government has now implemented three core changes to make it easier for consumers to use the Consumer Data Right (CDR). They are:
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Simplifying the consent process and streamlining requirements for providers. This would be done by allowing consents to be bundled, so consumers can provide multiple consents through one single action. The government said this would improve the consumer experience and increase uptake.
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Removing barriers for banks by simplifying requirements that apply when an accredited bank seeks data from a consumer. This change has been made after the government said that the previous process was “complex and confusing for consumers, often resulting in them dropping out”.
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Supporting innovation by extending a trial of CDR‑enabled energy products to 24 months (up from 12 months) and 2,000 customers (up from 1,000). Treasury said that the expansion will ensure the trial period supports the unique nature of energy contracts.
The new rules commenced yesterday (12 November).
Announcing the move, Jones said: “The CDR has the potential to be a transformational piece of economic reform, giving consumers the right to unlock the value of their data.
“The Government is removing friction within the CDR to improve cost-effectiveness by amending the CDR rules to make consent and operational enhancements.
“The Albanese Government is getting the CDR framework on a more sustainable footing. The Government is working with stakeholders to ensure we introduce changes that represent value‑for‑money.”
Several members of the fintech and lending industry have welcomed the move.
Treasury will reportedly undertake further consultation with stakeholders on proposed amendments to improve business consumer participation in the CDR.
You can find out more about open banking and CDR and its impact on lending in the space, in The Adviser’s In Focus podcast, here.
[Related: Broking association responds to government’s CDR move]
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