How to get the Consumer Data Right back on track  - Raidiam

Jamie Leach, Raidiam’s Open Data Strategist, looks at the progress of Australia’s Consumer Data Right ahead of the Senate’s vote on the Action Initiation Bill and shares her recommendations on what can be done to get it back on track. 

The 2024 CDR Summit 

For those unfamiliar, the CDR Summit, organised by Fintech Australia, is an annual event which brings together industry professionals to discuss the advancements and potential of the Consumer Data Right (CDR) in Australia. Raidiam were delighted to sponsor the event to show our support for progressing this agenda to help consumers reap the benefits that can be created. This year’s summit ran seamlessly, showcasing some of Australia’s best and brightest minds across three stages. The event radiated optimism, highlighting the progress made, the implementation of CDR, and the increasing number of consents across various fintech applications. Celebrating the CDR’s fourth anniversary, the summit attempted to emphasise the emerging innovations struggling to thrive amidst the current landscape of digital reform. However, challenges the size of Mount Everest still loom large. 

The challenges facing CDR 

In the weeks leading up to the summit, the CDR faced criticism in the press. Concerns centered around the high costs of compliance with a regime that has been slow to deliver consumer benefits. Reports from the AFR and Banking Day, based on an Accenture study commissioned by the Australian Banking Association (ABA), highlighted these issues.  

The timing of this criticism coincided with political posturing in Canberra between the current government and the opposition around the introduction of the Action Initiation Bill, also known as ‘write action’ for those outside Australia. Despite being drafted and tabled in the Senate in 2022, by mid-2024, the bill has been left to gather dust, and progress of the CDR has all but stalled. The next chapter for the bill happens on the 14^th August when a parliamentary vote is scheduled to be held, tabled by the opposition party.  

Is the CDR on track? 

Amid this noise, the questions are: Is the CDR on track? Is it worth progressing? Are consumers benefiting as promised? The answers are no, yes, and not yet. 

According to the Productivity Commissioner, “the new right is meant to lift up the opportunity for consumers and offer a genuine two-way street to support their continuing willingness to supply a crucial input to business, research and public policy — namely, their data … Consumers would no longer be just a source of data, they would rank equally with the key data collectors — businesses and governments — in being able to trade and use their data.” 

Despite stagnation, the motivation for CDR’s introduction and its benefits remain substantial. In line with the global introduction of Digital Public Infrastructure, CDR aims to enhance consumer experiences, reduce the cost-of-living crunch, and create greater internal efficiencies for participating enterprises. This framework remains poised to be a cornerstone of Australia’s Digital Evolution, just as it was when Dr Scott Farrell published his first review in 2018.  

How to progress the Consumer Data Right 

So, how exactly do we get the Consumer Data Right back on track? Here are six key tactics: 

1. Overhaul privacy legislation 
   In the absence of a robust privacy framework such as the General Data Protection Regulation (GDPR), the desire to ‘protect’ the consumer has led to an overly prescriptive framework and a number of unintended consequences. Overhauling the Privacy Act to fit the CDR within a solid framework can remove the need for complex accreditation processes.

2. Simplify accreditation models 
   Compared to other jurisdictions that are flourishing, Australia has created a complex labyrinth of accreditation models that actually preclude some existing businesses from gaining accreditation and servicing their current customers. Simplifying these models will allow businesses to gain accreditation and serve their customers effectively.

3. Enhance compliance and enforcement 
   The term ‘industry marking its own homework’ could be used to describe the Australian Competition and Consumer Commission’s (ACCC) reluctance to enforce compliance of the Data Holders. Why is it important that accurate real-time monitoring of the participants occur? At the beginning of the UK’s Open Banking regime, the lack of monitoring of the API performance led to some applications failing and consumer trust being eroded before it even began. A consumer using a fintech application that did not function as expected tended to blame the app, not questioning whether the Data Holder had shared the correct data in a timely fashion. Ensuring accurate real-time monitoring of participants is crucial to maintain consumer trust and application performance, as demonstrated by the UK’s Open Banking regime.

4. Establish a dedicated implementation entity  
   It is critical that enforcement be separated from implementation. The Data Standards Body (DSB) and the Tech-stack (Register) should be separated from the regulator. CDR needs an implementation agency that is explicitly tasked with delivering its original vision. We need to separate enforcement from implementation by creating an agency focused on delivering the original CDR vision which incorporates the DSB and the Registry. 

5. Define clear success metrics 
   Success metrics that enable the health and maturity of the CDR regime to be objectively assessed rather than influenced by industry groups with the deepest pockets is essential. These should include participation goals, data recipient metrics, data holder metrics, and API performance metrics.

6. Launch public education and awareness campaigns 
   Despite being funded multiple times, there has been no public education or awareness campaign to date. The UK Open Banking Implementation Entity (OBIE) once stated that failing to educate the public was one of their biggest regrets and impeded the adoption of Open Banking. Australia should learn from this experience and launch a national education campaign to help boost CDR adoption. 

Learning from the UK’s Smart Data Roadmap

Whilst the challenges continue, all eyes should be on the UK as it expands on its Smart Data Roadmap. Incredibly ambitious, with cross-sectoral use-cases tabled in the full report, the concept of consumer data being shared with informed consent to achieve multiple, valuable outcomes for individuals and SMEs alike is the holy grail that we have all invested in. Moreover, what started as a complex, multi-faceted regime in Australia, although slow to start, could so easily mirror the UK experience.  

CDR supporters, let us unite to positively influence and support the progression of this crucial national infrastructure. 

Interested in learning more about how we deliver secure and trusted data sharing ecosystems? Get in touch today!

Jamie Leach is Open Data Strategist at Raidiam. She is a frequent speaker/author on the transformative potential of data and passionate about sharing global best practices.