[UPDATE BLOG CONTENT HERE]

Last Friday, the Open Banking industry received a very welcome and positive update on the commitment and path forward for the Consumer Data Right (CDR).

Assistant Treasurer and Minister for Financial Services Stephen Jones spoke at an event hosted by CEDA about where the CDR is now, and where it needs to go. He expressed the current government’s support for the CDR, specifically so it can help “consumers [access] and unlock the value of their data”, however did acknowledge that gaps in the design, excessive costs and barriers to entry have prevented the CDR from fulfilling its potential to consumers.

This led the Minister to declare the path forward for the CDR, and how the government plans to steer this important initiative on the right course. The changes will focus on reducing the “obvious problems that are driving costs and limiting take‑up of the CDR”.

Consent and pre-consent processes are improving

Two immensely welcome changes (for which Skript has been consistently advocating) were announced:

1. Streamlined consent UX standards, allowing the friction within the digital consent process to be significantly reduced.

2. The requirement for data holders to make it easier for businesses to access the CDR by simplifying the process they currently have to complete to appoint data-sharing privileges to an individual before digital consent can be granted.

Emphasis on enabling use cases

To assist the industry in growing the CDR to truly unlock benefits for consumers at scale sooner, the government has also prioritised three use cases:

1. Consumer finance and borrowing

2. Energy switching

3. And accounting services to small businesses

Focusing on developments and enhancements to the CDR that contribute towards the enablement of these use cases will help the industry achieve mass adoption and maximum consumer benefit for particularly valuable propositions.

CDR will expand to Non-Bank Lending by 2026

The Minister also announced that the scope of the CDR will proceed to cover Non-Bank Lending, and that the target for this industry to be live is mid-2026. This expansion will provide consumers with a holistic view of their finances, while also providing the industry with ample time for implementation.

Ban on screen scraping imminent?

Another hot topic the Minister touched on was screen scraping. “Industry can do better than screen scraping,” he said. “It is fundamentally unsafe.” This comes after a consultation was held just about a year ago on whether the CDR was a viable option to replace screen scraping if it were banned. He announced that he had asked Treasury to advise over the next 12 months on a way forward for a “full and formal ban of screen scraping”.

The first step towards Action Initiation

When discussing the upcoming Action Initiation Bill, which is currently in the Senate, the Minister seemed supportive of the initial step of laying the foundations that will enable future actions to be designated. Actions are instructions that third parties could pass through to data holders on the consumer’s behalf, and of course with their consent. Examples include account and provider switching and payment initiation. However, the Minister emphasised that he will not allow CDR actions to undermine or replicate other initiatives the Australian economy has already produced, or is actively working towards, including Digital ID and payment system modernisations.

Changes to the CDR to be assessed more thoroughly

In recognition of the effort and cost impacts on data holders from constant developments and enhancements to the ecosystem, the government has also proposed a more “structured and consultative approach for making standards changes”. This approach would place more emphasis on cost-to-value assessments, and would reduce the number of standards changes to smaller, fixed scheduled releases per year.

So what does all of this mean?

Skript sees this as a very positive step for Australia’s CDR. We have received clear support from the government to grow and enhance the ecosystem, focusing on consumer outcomes rather than industry costs and opportunities. Improvements to the CDR rules and standards, focusing on popular use cases, laying the foundation for action initiation, moving towards banning screen scraping, and being more deliberate and consultative on the tweaks we make to the CDR are all constructive measures that will help the CDR become more feasible, accessible and opportunistic for all participants. Most importantly, they will drive uptake from the industry and enable more competitive, innovative and empowering solutions for consumers.

Summary of key changes to the CDR rules and standards

We have summarised the key changes proposed under the consultations on the CDR rules and standard in the table below. While all of these changes will of course impact the consumer directly or indirectly, we have focused on the immediate and direct impact.