Later this week, the Morrison government will again look to pass the Treasury Laws Amendment (Consumer Data Right) Bill 2018, after it failed to receive parliamentary approval in April.
Under the draft bill – which underpins the open banking regime that came into effect on 1 July – individual and business consumers will be able to access their own data or direct custodians to share their data with accredited entities such as banks, telcos, energy companies and comparison service providers to get tailored access to services and competitive deals.
The CDR will first apply to the banking sector, with the energy and telecommunications sectors expected to follow in the coming years.
Treasurer Josh Frydenberg has lauded the benefits of CDR, stating that it would empower consumers and enhance competition in the market.
“Legislation to be introduced by the Morrison government this week will give consumers more power and allow them to compare and switch between products and services more easily,” he said.
“The Consumer Data Right reforms will also encourage competition between service providers, leading not only to better prices for customers but also more innovative products and services.”
The Treasurer also claimed that the initiative has “already seen major improvements” in transparency over the terms and conditions of some banking products, with three of the four major banks voluntarily launching the first stage of the CDR on 1 July.
The next stage, which is due in February 2020, will seek to provide consumers with greater access to information that banks hold on them; and provide them with the power to require banks to facilitate access to that information to third parties.
“Improved consumer control over data will support better price comparison services, taking into account people’s actual circumstances, and promote more convenient switching between products and providers,” Mr Frydenberg continued.
“Improved access to data will also enable the development of better and more convenient products and services, customised to individuals’ needs.”
The Treasurer said that the Australian Competition and Consumer Commission (ACCC) will issue the lock-down version of the rules governing the system by the end of August, adding that the interim Data Standards Body has, in the last week, issued the implementation draft of the technical standards.
“High levels of privacy protection and information security will be a core feature of the system,” he said. “It is not a right for businesses to share consumer’s data without their consent.”
Mr Frydenberg concluded: “Improved competition and data-driven innovation will support economic growth and create new high-value jobs in Australia.
“Better access to data will also support more efficient processes for businesses, with savings flowing through to consumers.”
The Australian Banking Association (ABA) has welcomed the government’s commitment to passing the CDR legislation as part of the broader implementation of the open banking regime.
The ABA’s executive director of policy, Christine Cupitt, said the bill is a critical step to ensure the reforms moved forward and ensured that the system was “safe and secure” for Australians to use.
“Open Banking will be a win for customers, increasing competition and making it easier to get the best deal possible from their bank,” Ms Cupitt said.
“Giving customers greater access to their data will make it easier and simpler to shop around for a better deal on a credit card, followed by home loans and other banking products.
“Thorough testing of this regime is vitally important to the success of this reform and to ensure Australians trust and use it.”
She concluded: “Passing this legislation is an important step to setting up a safe and secure system.”
The CDR will be regulated by the ACCC and the Office of the Australian Information Commissioner, with a new Data Standards Body developing transfer and security standards.