Anyone who has heard me speak over the year and a bit since I became the Minister will have heard me talk about scams.
And in particular, we believe the Consumer Data Right can be used to make a real, lasting difference.
Scammers are causing untold misery across the country. Conservative estimates tell us that $3 billion were lost last year, and I fully expect that number to keep growing in the short term, as awareness goes up and more people report their losses.
But Australians finally have a Government that is fighting back.
The new, world-leading National Anti-Scams Centre came to life on 1 July, and the first fusion cell is in operation right now, going after investment scams, which made up about half of reported scam losses last year.
For too long, Australians have been left to fight scammers on their own. Those days are over.
It’s great to see that those conversations will be happening over the next couple of days, because, clearly, we want the fintech industry to be part of the fight as well.
We believe the fintech industry can make a real, lasting difference, in finding better ways for people to share and use their data.
The practice of screen scraping – in which consumers hand over their credentials, like log in details and passwords, for a third party to access their account – cuts against the work we as a Government and many parts of the fintech industry are trying to do to use data more safely, and to store it more safely.
A few weeks after the May Budget, when I spoke at CEDA, I set out the Government’s thinking on the Consumer Data Right.
I pointed out what I think is pretty obvious: that a lot of money has been spent on CDR, both by the Government and by the financial sector, for not a great amount of take-up, and not a great amount of use cases.
In that speech I also mentioned that we would be consulting on options to regulate screen scraping, following on from last year’s Statutory Review into CDR, which recommended that screen scraping be banned where CDR is a viable alternative.
The high security and privacy requirements for CDR data holders and recipients have an obvious application in protecting Australians’ data and Australians’ assets.
Today, we are beginning that consultation process, with a discussion paper on the policy and regulatory implications of screen scraping. Given that we are consulting on a few different topics in the CDR and fintech world at the moment, we want to give everyone plenty of time to work through the questions and issues in the paper, and so the window for submissions will be 8 weeks long.
It is a paper that is more about asking questions than stating facts. We want to understand the different ways that screen scraping is used, why it is favoured over other forms of data sharing, and the risks involved for consumers.
We know this issue is complex, so we want to ask the right questions and understand that complexity. We don’t want to force CDR into uses it isn’t suitable for, or where it isn’t yet mature enough to be effective.
We also know that screen scraping is often seen as the least bad option, and that many people and businesses only use it due to a perceived lack of alternatives.
But let me say this: I really don’t think that asking people to hand over their online banking passwords to lenders, mortgage brokers, and others is the best we can do.
The world has moved on.
It’s hard to see a big future for any business model that relies on people sending through their log in details.
I find it hard to accept that we can’t do better for consumers.
We all have a role in making that happen.
The way forward for CDR
More broadly on CDR, the strategy that we have set out for the next two years is aimed at driving take up and driving use cases.
It is an attempt to deepen CDR’s place where it already exists, let the system mature, and create space for uses cases to grow.
As I’ve said plenty of times, we all know the potential benefits of CDR. But for CDR to last, we need to see them become real.
Of course, CDR’s potential as an alternative to screen scraping is one of them. But there are many more.
Another is increased competition, and that is why just last week we put out draft rules to expand the CDR into non-bank lending. These rules would give consumers a more complete view of their finances, and allow them to shop around and make other important financial decisions with confidence.
Another potential benefit flows on from this, into the work we are doing to regulate Buy Now, Pay Later products as credit. Having CDR available in non-bank lending may make it quicker and easier for BNPL providers to make the checks that will be necessary to comply with the new, scalable responsible lending obligations that we have proposed for their industry.
There are also potential benefits in CDR for small business, which is why last month I signed off on operational enhancements to allow businesses to more easily and safely share their CDR data with third parties, such as bookkeepers and software providers.
Through all of it we have the same objective: use cases, use cases, use cases.
The work we have done, both in the Budget and since, has been aimed at giving CDR the best chance to turn its potential into reality. It is about driving real world, day to day, practical benefits for consumers.
Consumers are at the heart of the Government’s agenda, and they have to be at the heart of the Consumer Data Right.
- The Hon Stephen Jones MP is the federal assistant treasurer and Minister for financial services. This is an edited version of his speech to Fintech Australia’s Intersekt conference on August 30.