FinTech Australia and open banking companies want the federal government to sort out a consumer data right roadmap

- May 30, 2023 3 MIN READ
Rehan D'Almedia
FinTech Australia MD Rehan D'Almedia
Australia’s roll out of open banking under the consumer data right (CDR) is stalling ahead of the third anniversary of its introduction, with industry lobby groups and the fintech sector calling on the federal government to put in place a long sought-after roadmap for CDR implementation.

FinTech Australia and the Financial Data and Technology Association (FDATA) say that while an $88.8 million commitment over two years to CDR integration and rollout, announced in the federal budget earlier this month is welcome, the sector needs better guidance from regulators on the path forward.

CDR began in Australia in July 2020 as “open banking”, allowing consumers to consent for their data from banking to be used and analysed to help the better manage their finances and find better deals. Late last year it began expanding to the energy sector, with telecommunications among other consumer data sets also on the drawing board.

In September 2022, the new Labor government released an independent statutory review into the CDR framework, and its implementation, which found it has been “broadly effective” thus far.

But the glacial pace of its introduction has seen fintechs leave the field. Late last year, UK fintech Truelayer suspended its Australian operations citing “challenging market conditions”.

Legislation for amendments to the Consumer Data Right for action initiation reform were introduced to parliament last November and now sit in the Senate, awaiting approval, after the Senate Economics Legislation Committee held an inquiry into the changes and handed down its report earlier this month.

The industry is hoping the changes will pass before parliament rises for the long winter break. The reforms will enable consumers to automate payments and money management, allowing them to switch service providers more seamlessly. It will also create a raft of use cases that will bring automation to digital life administration giving consumers more time to do other things.

FinTech Australia general manager Rehan D’Almeida said the potential to improve banking is being hampered by the time taken to approve the changes.

“We know the CDR will play a crucial role in improving the quality of services offered to Australians, growing their overall financial literacy and in turn bolstering the economy. During a cost of living crisis, the $88.8 million allocated in this federal budget is money well spent,” he said.

“Building on this, we’re calling for policy makers to chart the future of the rollout and ensure we maximise the impact of these funds. Much like the Federal Government, we believe the CDR will be an agent of change for the Australian economy, and wish to see it fully implemented as quickly and as cost-effectively as possible.”

A new path

FDATA’s ANZ regional director Mathew Mytka said Australia is charting a path no one else has taken.

This means we need a map to help everyone navigate. A compelling vision and clear outline on where the Consumer Data Right reforms are going is crucial to realise the potential. Despite many calls for this from industry, it’s still missing,”

Matthew Mytka

FDATA regional director Mathew Mytka

“Some of the funds in the budget should be allocated to creating this roadmap. With a strong codesign methodology behind it to reflect the promises of giving Australian consumers meaningful control of their data, catalysing industry competition and supporting data-enabled innovation across the economy.

“We’ve seen the UK carve a path with the next phase of the Open Banking Implementation Entity. And the Joint Regulatory Oversight Committee and the roadmap they’ve created is a reference point. But CDR is bigger than banking and we need something to reflect this Aussie ambition.”

Next month the two industry groups are launching an awareness campaign in a collaboration with the Australian Information Industry Association.

CDR Month is designed to build awareness and understanding of the Consumer Data Right, showcasing innovative use cases, and foster collaboration among stakeholders from the public and private sectors.