Expanded CDR to give customers more control 

The Australian government has released draft legislation of the consumer data right (CDR) to make it “easier and safer” for consumers and small businesses to carry out everyday tasks online.

The latest tweak to the CDR called “action initiative” would “expand the CDR from a data-sharing scheme to a scheme that allows consumers to act on insights they receive”.

For example, it seeks to enable consumers and small businesses to take their data‑sharing rights “one step further” by initiating actions like opening and closing accounts, making payments and applying for services through the CDR.

The consumer data right (CDR) has been expanding across superannuation, insurance and the banking and non-banking sector, providing consumer and small businesses more rights to instruct businesses and third parties to use their data, as well as work on behalf of them (once consent is given.)

Following the release of the Inquiry into Future Directions for the Consumer Data Right (December 2021) the federal government agreed to enable consumers and businesses to instruct third parties to initiate actions on their behalf, which could be enabled by action initiation. 

Introducing “action initiation” in the CDR is part of the government’s commitment to expand the CDR across the economy and grow the opportunities for consumers to make use of their own data for their benefit.

“Action initiation would empower consumers to authorise, manage and facilitate actions securely in the digital economy,” the draft paper read. 

The proposed legislation contains a number of key features such as acting “honestly, efficiently and fairly”, consent of a consumer must be given and a “service provider cannot charge a CDR premium”.

For example, while a bank would be able to charge a consumer a home loan application fee for a request that came through the CDR, it could not charge a higher fee than what would be applied outside the CDR. 

The draft legislation said the changes would reduce complexity, time and cost for consumers looking to safely get better deals and services that meet their needs, unlock new business models, drive innovation and boost competition.

The latest proposed changes on action initiations are now open for public review until 24 October.

The draft legislation would form the overarching framework in the CDR and include obligations for parties such as fintechs, banks and non-banks that handle action on behalf of consumers.

[Related: Consultation open for CDR expansion to non-banks]