Treasury's latest rule changes to the Consumer Data Right lowers barriers for businesses to use open banking, providing better service for consumers.
Treasury recently announced amendments to its Consumer Data Right (CDR) rules that will support increased participation in open banking and 'empower' customers to reap value from their data.
These new amendments allow for current CDR participants, accredited by the ACCC, to sponsor other parties to become accredited or allow them to operate as a representative.
Essentially, businesses can piggy back off an accredited businesses to use open banking, without needing to meet the same requirements.
Previously there was extensive legal and IT red tape for a business to become an accredited data recipient (ADR).
Senator Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, said that CDR is a 'game changer' for digital innovation.
"The rules made today are an important step in supporting the development of a vibrant data economy that provides benefits to business and consumers," Ms Hume said.
"The Government is committed to supporting businesses and consumers to participate in the Consumer Data Right and will continue to ensure that the rules support that objective."
Tonia Berglund, Director of Product at Envestnet Yodlee, said that these welcome changes are in the best interests of Australian consumers and the economy as it will enable a 'vibrant' fintech sector.
"We're encouraged by Treasury's intention to reduce barriers to entry and support participation in the open banking and open data space," Ms Berglund said.
"Good examples of the benefits of open banking are the incredible innovation that our partners, like Raiz and 86 400, have introduced."
How consumers can use their data
In addition to added business benefits, the rules will allow consumers to continue being in control of their data while benefiting from more options as to how they disclose their data.
Specifically, consumers will be able to more easily and securely share their data with certain trusted professionals, including their accountant, tax agent, financial counsellor, financial adviser, or mortgage broker.
Consumers can also disclose limited data insights outside the CDR for specific purposes, such as verifying their identity.
Lastly, the amendments will simplify the process of sharing data for consumers with joint accounts by allowing each account holder to consent to sharing data from the account, while maintaining control and transparency for all account holders.
This last measure will commence on 1 July 2022 to allow an appropriate implementation period.
The CDR will control what data is shared, for how long, with whom and for what purposes through consumer privacy and security protections.
According to Treasury, it encourages businesses to compete and innovate, and makes it easier for households and small businesses to make financial product choices.
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