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Developments in Australia’s Consumer Data Right in response to community feedback

Date

Treasury acknowledges the significant and valuable feedback that the Consumer Data Right community has provided to Treasury and the ACCC to expand and strengthen Australia’s Consumer Data Right framework. This feedback has informed a number of important developments to broaden access to CDR data, including the next steps in extending the CDR to the energy sector.

Rule development to broaden access arrangements

Based on CDR community feedback, draft rules to broaden access arrangements are being developed and will be released soon for formal consultation. These will include changes to:

  • Empower consumers to give accountants, lawyers, tax practitioners (including BAS agents), licensed financial advisers and planners, and residential mortgage brokers (referred to as ‘trusted advisers)’ access to CDR data.
  • Allow consumers to share certain ‘insights’ obtained from CDR data, to verify a consumer’s identity, their account balance, income level and expenses. For example, this will facilitate a safer and more efficient way to confirm details to support a loan assessment, minimising the need for an applicant to manually collect certain information and provide it to the credit provider, or even worse, provide their bank account password to the provider in order for the provider to ‘screen scrape’ that information. 
  • Support new pathways for participation by allowing an Accredited Data Recipient to sponsor other parties to become accredited or allow their agents to participate in the system. For example, this will enable Accredited Data Recipients to share CDR data with other businesses in their data sharing ecosystem who aren’t accredited but who act on their behalf as an authorised agent, with liability for the acts of the agent attaching to the Accredited Data Recipient. Alternatively, an Accredited Data Recipient will also be able to assist another fintech to become accredited by ‘sponsoring’ them into the system.

The intent of the rules is to provide a safe, convenient and efficient way for consumers to consent to an accredited person sharing their data with trusted advisers, support consumer convenience and reduce the costs of accreditation for smaller participants and start‑ups, without reducing the overall security and privacy protections of the regime. These proposed changes will unlock a range of data‑driven products and services that will help consumers, including small and medium sized businesses, to benefit from their financial data, reducing time and effort in managing their financial affairs and providing a more secure framework to share their banking data with their trusted advisers.

For example:

  • this will enable an individual or small business using online accounting software (Accredited Data Recipient) to consent to the platform securely sharing financial data obtained from their bank with their accountant or BAS agent (‘trusted adviser’) to complete their tax return;
  • enable a person to conveniently and securely share their banking data to a residential mortgage broker to help find them the best mortgage to purchase a property; and
  • enable a person to securely share their financial data with their lawyer to support a more streamlined process for a legal property settlement in a family court proceeding.

In the coming weeks, the Data Standards Body within Treasury will commence discussions with the CDR community on developing supporting standards prior to the release of the draft rules.

Engagement on a peer‑to‑peer model for the energy sector and an opt‑out data sharing model for joint accounts

Last year the Government started the roll out of the Consumer Data Right to the energy sector, with an eye to giving consumers more power to compare and switch to cheaper providers. Informed by stakeholder feedback and initial design and scoping work, the Australian Government has determined that a peer‑to‑peer model is the more effective data access model for the energy sector rather than a gateway model. To support the development of rules and standards to implement a peer‑to‑peer model in the energy sector, Treasury is inviting views on design options as outlined in Peer‑to‑peer data access model in the energy sectors.

In response to feedback that joint account rules could limit engagement with the Consumer Data Right, Treasury is seeking views on a proposal to support an ‘opt‑out’ approach for joint accounts for both the banking and energy sectors with appropriate consumer safeguards as outlined in Opt‑out data sharing model for joint accounts. This proposed change has the potential to reduce significant friction and enhance consumer experience by aligning CDR data sharing consent requirements more closely with the existing permissions and consents between joint account holders in operating a joint account. For example, one option is that if the permissions on a joint account allow each joint account holder to transact on the account without requiring joint consent for each separate transaction, likewise each joint account holder will be able to authorise the sharing of account data by default unless one or both account holders choose to opt‑out of data sharing. 

To support this approach, current requirements for banks to implement the joint account requirements that would have applied from November 2021 will be deferred, with new compliance dates to be set following consultation.

Treasury has heard stakeholder views on the optimal settings for providing CDR data ‘direct to consumers’ and proposes to undertake further work to ensure we get the settings right for direct to consumer obligations. Compliance with these obligations, which are due to come into effect in November 2021, will be deferred, pending a future consultation process.

Opportunities to provide feedback

These proposed changes respond to CDR community feedback and Treasury appreciates the community’s continued engagement in the development of a world‑leading CDR framework.

We are seeking stakeholder views on the issues outlined in the consultation papers by 26 May 2021.

There will also be opportunities for discussion and feedback during May through various CDR forums and engagement mechanisms.