Login
ISCOVER
With the government having updated Consumer Data Right rules, members of the industry have revealed how the changes will benefit brokers and their clients.
On Tuesday (12 November), changes to the Consumer Data Right legislation commenced, including the ability for consents to be bundled, a simplification of requirements when asking for consents, and an expansion of the energy trial.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Following the announcement, several members of the broking and fintech industry welcomed the move, saying that the changes could accelerate the use of CDR-enabled products, including home loan applications and reprice/refinance requests.
The Mortgage and Finance Association of Australia (MFAA) – which had provided a submission to the consultation regarding the enhancements and has been calling for an acceleration in CDR adoption – said it welcomed “progress on the government front” following stakeholder feedback, as it moved to “refine the framework to make it as easy as possible for consumers to access and for trusted advisers to use”.
MFAA CEO Anja Pannek said: “We’ve consistently emphasised that the Consumer Data Right (CDR) is a critical component of our industry’s future and will enhance the consumer experience when working with their mortgage broker as a trusted adviser.
“The adoption of these changes offers significant benefits for our members’ clients, with simplified consent mechanisms encouraging deeper engagement with the CDR. This, in turn, empowers brokers to deliver more seamless and personalised services tailored to their clients.
“These changes enable brokers to confidently leverage CDR products to access their clients’ financial information, empowering them to do what they do best – support their clients to achieve their home ownership aspirations.”
However, the MFAA CEO said that it was “essential to maintain the comprehensiveness of available data”, adding that the association looked forward to the delivery of those further aspects of the CDR highlighted by the Assistant Treasurer this year, including the expansion of CDR to non-bank lending in 2025 and beyond.
“We will also continue to collaborate with our members to identify and address opportunities for further refinement and to support the Government’s and Treasury’s efforts in advancing the CDR framework,” she said.
NextGen to roll out updated open banking offering
Renee Blethyn, head of broker partnerships at mortgage technology fintech NextGen, also said the changes to the legislation were “really positive and encouraging” as they help improve the efficiency, transparency, and competitiveness of the financial services industry.
Speaking to The Adviser, Blethyn said: “Currently the ‘start to finish’ data consent, sharing and bank connection median time for consumers is less than eight minutes, with more than 50 per cent completing in less than five minutes.
“Once these changes are in place we expect to see an increase in completion rates due to the simplification of the process and the reduction in time taken to complete, providing a better experience for both consumers and mortgage brokers.
“The changes to the CDR rules for open banking present significant opportunities for mortgage brokers to enhance the service they provide to clients, improve operational efficiency and remain competitive in a rapidly changing financial services landscape.”
Indeed, NextGen said it had anticipated these measures (as communicated in the CDR reset announcement) and would therefore be “fast to market” to update its broker and client experience to reflect the updates.
Brokers using NextGen Open Banking will reportedly soon benefit from a faster and simpler process for clients to complete their data sharing with their broker as part of the fact-find process (as information will be presented in a clearer way and mandatory tick boxes for consent will be consolidated to one, reducing the potential for clients to get confused and stop the sharing process).
NextGen also said that as borrowers sharing open banking data with their broker would receive fewer email notifications, this would reduce information overload/fatigue, thereby improving engagement.
Similarly, Ruth Hatherley, founder and CEO of open banking platform Stryd, said that the simplification of multiple consents for consumers would help build trust in the system and allow brokers to gather source-of-truth information to rely on for the home loan application process.
“Simplifying the CDR consent process will help consumers share financial data safely through open banking APIs, rather than defaulting to methods that at first glance appear to be more convenient – but actually present IT security risks – such as screen scraping or emailing PDFs,” she told The Adviser.
“With non-bank lending coming into CDR from 2025 onwards, it’s great news for borrowers and mortgage brokers that the CDR consent process is more straightforward and unified. Brokers won’t need to do so much chasing up to get their clients onboarded onto CDR-enabled digital platforms and benefit from automated processes.”
Hatherley also welcomed the extended consent period for some energy products to 24 months as “really encouraging”, saying that such an extension in financial services would also be beneficial.
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: Government announces open banking changes]
JOIN THE DISCUSSION