Consumer Data Right for banking sector arrives
After months of designing, building and testing the IT infrastructure needed to make it a success, the Consumer Data Right (CDR) was officially launched this week by the Australian Government.
Initially being rolled out in the financial services sector, the “open banking” system will enable consumers to use their own data to compare and switch products. Encompassing deposits, transaction accounts, credit and debit cards, the technology will enable consumers to seamlessly transfer their data between banks and accredited fintech providers.
Australian Information Commissioner and Privacy Commissioner Angelene Falk said the reform — designed to boost competition and innovation — will require firms to uphold strict privacy and security obligations. Ultimately, consumers will be able to control what data is shared, with whom and for what purposes.
“This reform introduces significant changes to information sharing practices [...] and is designed to safeguard consumer privacy,” Falk said.
“By providing a secure and convenient way to transfer data to an accredited provider of their choice, it will allow consumers to access a new service or find a better deal.
“Strong privacy and accountability measures are built into the system and will be enforced by the OAIC and the Australian Competition and Consumer Commission.”
Fintechs accredited by the ACCC will be able to connect to the system and — following express consent — help consumers determine which products are the best fit for their needs, by analysing their data.
However, obtaining ACCC accreditation will be a stringent process, with companies required to meet and maintain strict standards.
The regulation will be updated later this year, with the range of banking products covered by the reform expanded to mortgage, personal loan and joint account data, as of 1 November 2020.
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