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Government seeks to enshrine Consumer Data Right

The Morrison government is set to introduce legislation designed to provide Australians with a Consumer Data Right, as an extension to the open banking regime.

Treasurer Josh Frydenberg has announced that the federal government will table a bill in parliament this week, designed to give individuals with a Consumer Data Right (CDR) that would enable them to access personal data currently held by Australian businesses.

“It marks the beginning of a data revolution, with Australia set to become a world leader in implementing an economy-wide right for consumers to access and use data that businesses hold about them,” Mr Frydenberg said.

Mr Frydenberg said the establishment of a CDR would, as well as giving individuals and small businesses the right to access their own data, allow them to authorise accredited third parties to access it.

“This means people’s actual circumstances can be more accurately taken into account when engaging with product and service providers,” the Treasurer said.


“It will allow for consumers to more easily compare prices, switch between products and providers and have products and services customised to their individual needs.”

Mr Frydenberg also claimed that better access to data would also support more efficient processes for businesses, with savings flowing through to consumers.

“Improved competition and data-driven innovation will support economic growth and create new high-value jobs in Australia,” he continued.

The Treasurer noted that the CDR would first apply in the banking sector via the open banking regime, from 1 July 2019, before also applying to the energy and telecommunications sectors.

“This reform will implement commitments made by the government in response to our Review into Open Banking in Australia and the Productivity Commission’s Data Availability and Use Inquiry,” he said.

Mr Frydenberg added that the reforms would be overseen by the Australian Competition and Consumer Commission (ACCC) and the Office of the Australian Information Commissioner, with a new data standards body developing transfer and security standards.

“High levels of privacy protection and information security will be a core feature of the system,” Mr Frydenberg said.

Speaking to Mortgage Business last month, David Shellenberger, senior director of scoring and advanced analytics at US firm FICO, said that the open banking regime, which provides consumers in the financial sector with a CDR, would help further drive competition in the banking sector.  

“I would expect that there would be greater competition with more data,” Mr Shellenberger said.

“If I’m a lender and I have you as my customer, and you have all your banking relationships with me, the other potential competitors really don’t have the same view of you as I do.

“Asymmetrical information really is not conducive to a competitive marketplace, so by making data open to all players, it creates a much more competitive environment.”

He added: “I suspect as things go forward, obviously with [comprehensive credit reporting] as a first step and with open banking taking place in the middle of 2019, I think that we can expect a greater competitive environment.”

[Related: CCR could be a ‘gold standard’ for credit risk]

Government seeks to enshrine Consumer Data Right
Parliament house

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