Biza.io CEO Stuart Low
The government has slowed the rollout of the Consumer Data Right while it works on flaws in the system, but in the meantime CDR participants are pushing ahead with their own developments.
Data sharing tech company Biza.io has launched an initiative called CDR+, with the aim of getting the ball rolling on action initiation. Australian Payments Plus is working with players in the CDR market to integrate PayTo into their activities.
And open banking company Frollo has launched a program to help mutual banks incorporate CDR opportunities into their business development.
Last month, the Minster for Financial Services Stephen Jones announced that the government would pause the expansion of CDR into superannuation, insurance and telecommunications. CDR currently operates in the banking and energy sectors and is being extended into the non-bank lending sector.
The government has introduced legislation to add action initiation (including payment initiation) to the system but its implementation may be delayed.
The government’s move follows last year’s Statutory Review of the Consumer Data Right, which recommended that improvements to CDR functionality and data quality should be the government’s priority, ahead of rolling the system out to other industry sectors.
The review’s comments about data quality were echoed in an ACCC report this year, which said the poor quality of some of the data was “a concern”.
In another report on CDR, the Office of the Australian Information Commissioner said CDR privacy safeguards were not up to scratch. It found numerous instances of non-compliance among accredited entities.
And perhaps the biggest problem of all is that consumer research shows that most people have no idea what CDR or open banking are.
CDR participants still see a big future for the system and are pursuing a number of initiatives to keep the momentum going, despite the government’s pause.
The founder and chief executive of Biza.io, Stuart Low, said CDR+ is an industry-led initiative for extending and enhancing the features of the system, starting with voluntary action initiation.
Low said: “The priority will be to draft specifications and standards for action initiation, creating a new channel for consumers to instruct a business to initiate actions on their behalf.
“Legislation to introduce action initiation has not passed yet but there is nothing in the CDR rules to stop voluntary action initiation.
“Often, when we talk about action initiation we mean payment initiation, which involves regulated activities. Our focus will be on other activities, such as updating customer details.
At a CDR Showcase in Sydney last month, panel participants talked about the interaction of CDR and some of the developments on the New Payments Platform, particularly PayTo.
PayTo was developed by NPP Australia, a subsidiary of Australian Payments Plus, as an up-to-date and more user-friendly version of consumer direct debits. AP+ sees the real-time mandate payment service eventually playing a role in a range of business payments as well.
NPP Australia managing director Katrina Stuart, a member of the CDR Showcase panel, said: “We would say PayTo is payment initiation. You do not need CDR for payment initiation but CDR can add value to the process.
“There is no need to reinvent the wheel. If the consumer wants to action something they can move onto the payment rails and use PayTo.”
Frollo has created content to demonstrate to mutual banks how they can use CDR in their business development.
Frollo chief executive Tony Thrassis said: “Mutual banks face a variety of challenges, including rapid changes in technology, the regulatory and competitive landscape, and heightened customer expectations for seamless digital experiences.
“Open data is the answer to many of these pressures. Where open banking is up to now, you can start building a bank of the future centred around data and customer experience.”