Consumer Data Right now live
- 01 July, 2020 11:24
The Consumer Data Right has launched today, enabling consumers to share their banking data for transaction accounts and credit and debit cards to gain more personalised financial products and services.
In making the announcement, Australian Competition and Consumer Commission (ACCC) commissioner, Sarah Court, said the consumer data right is a significant milestone and gives consumers control over sharing their information. This may be able to provide them more personalised services and competitive offers without all the time and energy it would normally take for a consumer to do this on their own, she said.
As at launch, there are two accredited data recipients that have completed the necessary steps to securely receive data. A further 39 providers have already begun the process to become accredited data recipients. And from the start of November, consumers will be able to share their data relating to home loans, investment loans, personal loans and joint accounts.
Financial institutions have reacted positively to the platform going live, with NAB saying it’s investing in the Open Banking regime and is focused on ensuring the safety and security of customer information.
The Commonwealth bank said the data-driven innovation has the potential to deliver new services and better products to Australian consumers.
“The investment in Open Banking will allow a well regulated and secure framework for the sharing of customer data in Australia and a substantial improvement over other, unsafe practices,” CBA group executive of retail banking services, Angus Sullivan, said.
The accreditation register for financial institutions opened in May, after being pushed back a few months in February, for businesses to apply to be recognised as Accredited Data Recipients. The register has two main functions: To create a trusted data environment where encrypted data is only shared between approved participants and to provide a portal where businesses can apply to be accredited.
The Consumer Data Right legislation followed a Productivity Commission inquiry that called for a revolution of the country’s data policy framework. The legislation was announced in November 2016 and the plan received $44.6 million in last year’s Federal Budget to implement a framework for consumer data portability and transparency, and to give consumers greater control of their data.
In terms of its impact on the industry, Accenture A/NZ banking lead, Alex Trott, commented that the newer ‘challenger’ banks may be able to grab an advantage with open banking as they look to gain greater market share and create unique, digitally led customer experiences.
“Less encumbered by legacy technology, they are at an immediate advantage, but they also will need to work hard to gain consumer trust, when the others have a strong Australian heritage,” Trott said.
“Customers won’t immediately see a ‘big bang’ of activity, but they will benefit from more tailored and intuitive products and services, quicker applications, new ways to manage their finances, easier inter-bank account switching, and more responsible lending practices,” he said.
Banking is the first industry it is being applied to, under the Open Banking regime, with energy and telecommunications sectors to follow. The ACCC will commence consultations on the proposed rules for the energy sector shortly.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia