The Consumer Data Right (CDR) legislation in Australia has been introduced to enhance the nation’s modern banking sector. It’s also supposed to make it easier to match or compare different financial products across a range of industries in the country, according to Senator Jane Hume, the Federal Coalition’s Assistant Minister for Superannuation, Financial Services and Financial Technology.
Hume’s comments came during the Newfound Australia Fintech Market Mission launch which is an online event that will hold sessions from September 7-30, 2020. The event aims to assist Australian businesses, particularly the high-potential Fintech firms that are focused on expanding their business into international markets.
Established by Australia’s federal government in November 2017, the CDR laws allow local consumers to gain access to and control their data. It also helps them with comparing and switching between different financial products.
At present, the CDR is gradually being adopted or introduced into the Australian banking sector. Consumer data that’s associated with credit or debit cards, deposit and transaction accounts had been released on July 1, 2020. Mortgage and personal loan data will be available by November 2020.
Senator Hume stated:
“The CDR in Australia doesn’t just extend to Open Banking. We are the first economy that’s going to open up an industry wide consumer data right. We’ll roll it out aggressively to certain industries. The next cab off the rank is the energy industry, then we’ll move to telecommunications, superannuation and insurance.”
“The ongoing roll out of CDR would bring competitive dynamics to ‘grudge purchases.’ The ones you put at the back of the filing cabinet because it’s too hard to change providers. The idea is to make that switch far easier and put the consumer entirely in control of their own data.”
As first reported by InnovationAus, the nation’s $3 trillion superannuation industry could potentially benefit from the adoption of CDR legislation.
Hume claims that superannuation hasn’t attracted substantial tech investments because it operates under “a trust structure.” She noted that if we add the CDR to it and encourage consumers to look for a provider that suits them, then we’ll likely have many more opportunities from leading innovators who are “watching with interest right now.”
Senator Hume recommends expanding the Australian Fintech industry and wants to encourage participation from international players, which she believes will help local consumers.
“The centre of our focus is the Australian consumer. Greater adoption of Fintech means a financial system that’s much more inclusive, more competitive with better, more tailored products that meet consumers’ needs.”
“Three quarters of Australia’s Fintechs are already posting revenue and a quarter of the companies have year-on-year revenue growth of over 300%.”