CDR benefits will be worth the five-year wait: Hume

Joseph Brookes
Senior Reporter

Consumers will begin to see benefits of Australia’s data portability by next year after a half-decade “build phase”, according to Minister for Financial Services and the Digital Economy Jane Hume.

In an address to Committee for Economic Development of Australia on Thursday, Ms Hume flagged next financial year as the point Australian consumers will experience “tangible benefits” from the Consumer Data Right (CDR).

Banking product comparisons and switching will be easier next year, she said, because of a switch from the current passive CDR system to a more active one where providers can take actions on behalf of consumers.

Jane Hume
Digital Economy Minister Jane Hume

The change is the key recommendation from an extensive inquiry into the future directions of CDR, completed in October 2020 but not endorsed by the federal government until more than a year later.

The government accepted a recommendation to expanded CDR to enable third parties, with a consumer’s consent, to initiate actions beyond requests for data sharing.

The review and the change to a more active scheme came after concerns about the slow roll-out and uptake of CDR, with several milestones missed in its first application in open banking and complaints about an onerous accreditation system locking out smaller players.

On Thursday Minister Hume acknowledged that CDR scheme, which began with an open banking review in 2017, had experienced a slow start but talked up its transformative potential across the economy.

“There is no denying that, as with any new system, there was an intense upfront build phase to put the rules, guardrails and processes into place before the benefits of the new way of working are adopted by the marketplace and felt by consumers,” MS Hume said.

“But now, as we move into 2022-23, consumers will begin to see real and tangible benefits in ease of comparing products and switching.”

Many of the consumers benefiting from CDR won’t even know the flow of data is creating them, Ms Hume said, while for younger consumers it will “simply be the way things are done”.

“As the build phase shifts to a user-driven phase, the consumer-centric design of the CDR and, indeed, the digital economy will be fully realised. It will put Australia among the best in the world in data management and standards.”

CDR continues to be rolled out through open banking and is slated to next be applied to the energy sector and then telecommunications.

Do you know more? Contact James Riley via Email.

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