The Consumer Data Right passed two milestones last week, when small ADIs made data available on the system for the first time and the regulator amended the scheme rules allow intermediaries to collect data.
When the system went live in July with the launch of open banking, only the Big Four banks were providing data and there were two accredited data recipients – Frollo Australia and Regional Bank Australia.
Last week, “other relevant ADIs”, which includes non-major banks, building societies and credit unions, were required to have their product reference data available for data requests.
There are two types of data that ADIs must make available: product reference data, which includes product features, interest rates, fees and charges and eligibility criteria; and consumer data, which covers a consumer’s personal account details.
The big banks are currently providing product reference data and consumer data for some products. Other ADIs are providing product reference data now and will provide consumer data from July next year.
Brett Miller, the chief digital and information officer at software company Data Action, said financial institutions are still working out what opportunities open banking presents. Data Action has been working with more than a dozen banks to get their data ready for CDR.
“If banks and others get it right they will be able to use CDR to attract new customers. They have to identify unique use cases that will appeal to the market.”
One of the accredited data recipients, Frollo, offers consumers a budgeting and personal financial management app. It also has B2B side to its business, offering financial institutions a developer portal that allows them to create their own apps.
Frollo chief executive Gareth Gumbley said it was not surprising that only two data recipients had been accredited so far.
Gumbley said: “People did not realise how big a job it would be. It is challenging and rightly so. We are talking about protecting consumer data.”
In any case, Gumbley added, the real action starts next July, when all ADIs have to start sharing their consumer data.
He said the big banks were engaging actively with the system and Frollo has made close to two million requests for information since July.
He said the benefits financial institutions would get from CDR include streamlined processing, more efficient credit decisions and the ability to offer personal financial management tools.
The Australian Competition and Consumer Commission announced that it has amended the CDR rules to permit intermediaries to collect data on behalf of third party data recipients, with consumer consent.
The amended rules mean that accredited businesses can now ask other accredited businesses to obtain consumer data on their behalf. The change is intended to facilitate greater participation in CDR by fintechs.
An accredited business could, for example, outsource IT infrastructure and software of an intermediary to connect to a data holder’s system, rather than build their own.
The ACCC said the change would help reduce the cost and time needed to operate in the CDR system.