Australia’s financial services minister has promised customers will start to see “tangible benefits” from a new data sharing scheme – which aims to make it easier to apply for a mortgage or switch banks – by the deadline of next financial year.
In a speech to the Committee for Economic Development of Australia on Thursday, senator Jane Hume will provide an update on the government’s competition policy, Consumer Data Right (CDR), which was first announced in 2017.
She described it as the “pipes” for the safe and secure sharing of data of consumers.
Senator Hume said that it would replace “band-aid” offerings that tried to make it easier to make sense of a person’s data – for instance, the practice of screen-scraping, a process of automated data gathering, where a customer shares their internet banking and passwords to a third party.
“Many of us may have agreed to a practice known as screen-scraping, or have felt the need to share passwords – an obvious online safety risk – and the consumer has less control over what, how and when data is used,” Senator Hume said.
She said another option was price comparison services, but they weren’t personalised and therefore weren’t “comparing apples with apples”.
“Comparison systems in their current form simply can’t offer a level of personalisation or granularity that customers desire and deserve,” she said.
“The CDR gives consumers and businesses the capacity to tap into and use their own data in a way that was either impossible, overly complex or fraught with privacy and security issues in the past.”
Senator Hume said over time it would become “something that is likely to drive changes as far reaching to the Australian economy as floating the dollar”.
“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,” she is expected to say in her speech.
“But now, as we move into 2022-23, consumers will begin to see real and tangible benefits in ease of comparing products and switching.”
The scheme was expanded late last year to allow service providers to not only read a customer’s data, but also take action on their behalf – enabling them to close an account or switch to a better offer.
“There is already a strong flow of CDR data in the banking sector, where consumers can use their personal data to switch banks, take out a loan, apply for a new mortgage or add new financial management txjmtzywools like budgeting apps to their armoury,” Senator Hume said.
“As the CDR expands from banking into related financial fields, including general insurance, superannuation and the broader lending sector, there will be a substantial change to the way consumers can use their existing data to make better choices about the financial services they engage.”
