09 March 2020

Building on the Consumer Data Right to grow Australia’s digital economy

This article was written by Scott Farrell.

With Australian banking customers soon able to take control of sharing their banking data using the Consumer Data Right (CDR), the Australian Government is looking to the CDR’s future and how it can support a thriving customer-focussed digital economy.  A recent issues paper from a new Inquiry describes what this could mean for Australia and also seeks ideas on how to build the CDR to work for Australian consumers and businesses.  For businesses from all sectors, this is an opportunity to help shape part of the foundations of our future digital economy.

In this Alert we briefly answer the following questions:

  • What is the Consumer Data Right?
  • What is this Inquiry about?
  • What does that mean?
  • What could the future hold?
  • What should I do?

The issues paper of the Inquiry can be found here.

What is the Consumer Data Right?

The Consumer Data Right is a general right created for consumers to control their data, including who can have it and who can use it.  It gives customers the right to require that information which they already share with a business be shared with someone else that the customer chooses to trust.  It starts with banking, where it is called Open Banking, soon and work is underway for its commencement in the energy sector.  More sectors will follow and it is to form a single customer-driven data sharing framework across the Australian economy.  More information on the Consumer Data Right can be found here.

What is this Inquiry about?

In January, the Australian Government announced an Inquiry into Future Directions for the Consumer Data Right (the announcement can be found here).[1]  The Inquiry is tasked with looking at how the Consumer Data Right could be enhanced and leveraged to boost innovation and competition, and support the development of a safe and efficient digital economy, benefiting Australians and Australia. The Terms of Reference (which can be found here) require the Inquiry to make recommendations to the Treasurer on options to:

  • expand the functions that the Consumer Data Right can perform
  • ensure the CDR promotes innovation in a manner that is inclusive of the needs of vulnerable consumers
  • leverage the CDR structures to support the development of broader productivity- enhancing standards and a safe and efficient digital economy
  • leverage the development of the CDR with other countries that are developing similar regimes, to enhance opportunities for Australian consumers, businesses and the Australian economy.

The Inquiry is not limited to the initial CDR sectors (banking, energy, telecommunications) and it is interested in receiving submissions from all sectors of the economy.  The Inquiry is forward-looking, focussing on the future purpose, use and vision for the CDR, rather than its current implementation.

What does that mean?

The issues paper provides some examples of issues that the Inquiry is proposing to consider.  These include looking at:

  • Write access: how ‘write’ access could be added to the CDR, so that a customer could direct that a trusted third party is able to change or add to that customer’s data held by a data holder.  Importantly, this is not limited in its application to payment initiation, and it extends beyond banking too.
  • Switching: how the CDR could facilitate consumers’ decisions to change service providers and how to make the change more easily when they have chosen to.
  • Consent: how standardised language could be used for consents in the CDR and what consumers could need to keep track of their consents.

Other examples are set out in the paper, including industry cooperation in the creation of voluntary data sets, the use of tiered accreditation to promote broader access without increasing risk and how CDR customer authentication requirements relate, or could link to, other digital identification and verification processes.  Also, submissions are requested on how solutions which have been established for the CDR, like the Data Standards Body, could be leveraged further to assist in other parts of the digital economy.  Importantly, in alignment with Inquiry’s Terms of Reference, there is also an express request for submissions on consumer protection including with respect to the potentially diverse needs of different customers.

What could the future hold?

The issues paper describes not only the continuing principles of the CDR (consumer focus, to encourage competition, to create opportunities and efficiency and fairness) but it also describes possible future roles and outcomes of the Consumer Data Right.  For consumers, this includes improving the choice, convenience and confidence of consumers including, for example, reducing the time spent on organising ‘life admin’.  It is intended to be a “safer track” for consumers to engage with the changing world of the digital economy.  For businesses this includes providing the clarity, certainty and consistency needed for them to invest in their technology, people and customers and compete in the digital economy.  This is not only through standards, systems and transparent responsibilities but also by providing flexibility for, and fairness between, businesses.  The issues paper also notes that care is needed to assess and manage additional risks which can arise from a broader and deeper use of data and that the CDR needs to provide a sustainable foundation.  Submissions on the future roles and outcomes of the Consumer Data Right are requested, as are submissions on how the CDR can be leveraged to enhance future international opportunities for Australian consumers and businesses.

What should I do?

It is time to engage with the development of Consumer Data Right.  At only seven pages long, the issues paper is an easy read.  The invitation to make submissions to the Inquiry presents a clear opportunity for those with a future connected to Australia’s digital economy to get involved in shaping a critical part of its foundation.  Submissions can be made to The Treasury as described in the issues paper up to 23 April 2020.



[1] The author of this article is leading the Inquiry into the Future of the Consumer Data Right for the Australian Government in his personal capacity.  This alert is not prepared in that capacity.


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