This article is a collaboration between Quill Peak, Studioworks and Open Data Australia - all of us keenly interested in the success of the CDR in Australia.
The first of November was an important date in the ongoing evolution of Australia’s Consumer Data Right.
Having almost doubled from 1 July to 1 September, the number of registered data holders was scheduled to double again by 1 November 2021.
In addition, the types of consumers who can share data using CDR expanded to include business customers, albeit at this stage only for business customers of the major banks. All the non-major banks were also required to commence sharing related to property loans and personal loans.
So what’s been the outcome?
The number of registered ADRs increased significantly with 31 new ADRs since our last update on 1 September bringing the total to 62 at 1 November 2021 covering 86 brands.
It had initially been a disappointingly slow start to CDR when open banking went live in Australia on 1 July 2021. Just 16 banks were ready on time. But, based on the ACCC’s rectification schedule, 43 non-compliant banks had proposed that they would meet their CDR obligations by 1 November 2021.
For many banks it was a late scramble to complete registration as a data holder.
In the seven weeks since our update on 1 September just three additional banks had been registered as data holders. But then the registrations started flooding in. In the fortnight before the 1 November deadline another twenty-eight banks were registered, including eight that had compliance deadlines up to 8 months after 1 November 2021 but have been able to meet their registration obligations.
This means that now a majority of banks are registered as data holders.
Some are ‘still on the journey’ to meeting their obligations as data holders. These banks had not received exemptions, but had submitted plans to the ACCC outlining how and when they expected to meet their CDR obligations. However seven of these banks still missed the 1 November 2021 milestone, which, remember, was the revised date that they themselves had proposed to the ACCC as the date by which they would be compliant.
Other banks have received exemptions from the ACCC that extend over the next two years, deferring when their compliance obligations begin.
The ACCC has noted that it is “actively following up all non-compliant ADIs” which are “expected to promptly rectify their non-compliance or face possible enforcement consideration.”
The data holder registration process itself has not been without its challenges.
Each data holder must pass the ACCC’s Conformance Test Suite before they can be made active on the CDR register.
The ACCC’s conformance test suite for data holder registration includes seventeen tests including the ability to respond to a data sharing request from an ADR, consent tests, information security tests and some API tests. But it is, as its name says, only a test suite. Data holders will still need to have done their own testing to ensure that their APIs actually work.
Notwithstanding this, the acceleration in registration means more customers from more banks are now able to share their banking data to take advantage of new offers. This is something to celebrate.
Or at least it would be if there was an equally large range of offers for customers to choose from.
While the number of data holders has now doubled, it’s a different story for accredited data recipients.
While the number of active or accredited ADRs increased over 50% since 1 September 2021, just two more data recipients have become active – Yodlee and illion – bringing the total number of active data recipients on 1 November 2021to just eight.
In addition there are a further twelve data recipients who are accredited but not yet active.
Australia’s score of ADRs stands in stark contrast to the almost 500 third party providers in the EU and the UK.
CBA remains the only major bank which is accredited and active as data recipient.
But CBA’s ADR offering is very limited. The bank can only receive data from just two of the 62 registered data holders, with more only expected ‘in the New Year’. And customers can only access open data through the bank’s app, and not through internet banking.
Since our last update National Australia Bank and Westpac have been accredited as data recipients but they are not yet active.
This leaves ANZ as the only major bank which is not also an ADR. It had been reported that ANZ is working to become a data recipient in the second half of this calendar year.[i]
Two other banks (Beyond Bank and Volt) were accredited as data recipients in the period along with three other entities (Fiskil, Zepto and True Layer).
In Field of Dreams: Build it and they will come we noted that the development of use cases which utilise data shared through the CDR to deliver value will be critical to the success of the CDR in Australia.
With more data available from more banks, there are even more reasons for organisations to become accredited as data recipients.
The good news is that there is a pipeline of propositions on the way. In our survey report, Field of Dreams, we noted that 55% of organisations responding to our survey had propositions which were being built, tested or in design. A further 25% were working on concepts or discussing options.
If CDR is going to be successful, the rapid acceleration in the number of data holders needs to be matched by an acceleration in the number of active accredited data recipients offering benefits to consumers. All organisations which have been or could be designated for data sharing under the CDR legislative framework should be taking action now.
‘Those brands that lean in will pave the way for change.’
[i] Eyers, James, ANZ set to join world of open banking after deal with start-up Frollo, Australian Financial Review, 28 April 2021.
Paul is a consultant specialising in Open Data, the Consumer Data Right and Open Banking.
Founder, Open Data Australia
Robin is a consultant specialising in the development of new customer propositions and co-founder of Studioworks, a community of independent agencies and consultancies delivering pioneering work for their clients. See www.studioworks.net/clients to learn more
Open Data Australia is a not-for-profit organisation and the Australian member of the Global Open Data Institute network. See www.opendataaustralia.org to learn more