The latest changes to Treasury’s Consumer Data Right rules lower barriers for businesses to use open banking, providing better service to consumers.
The Treasury recently announced changes to its Consumer Data Law (CDR) rules that will support increased participation in open banking and “allow” customers to take advantage of their data.
These new changes allow current CDR participants, accredited by ACCC, to sponsor other parties to become accredited or allow them to operate as a representative.
Essentially, businesses can rely on an accredited company to use open banking, without having to meet the same requirements.
Previously there was a heavy legal and IT bureaucracy for a company to become an Accredited Data Recipient (ADR).
Senator Jane Hume, Minister of Pensions, Financial Services and Digital Economy, said CDR is a “game changer” for digital innovation.
“The rules established today are an important step in supporting the development of a vibrant data economy that delivers benefits to businesses and consumers,” said Ms. Hume.
“The government is committed to helping businesses and consumers participate in consumer data law and will continue to ensure that the rules support this goal. “
Tonia Berglund, Director of Product at Envestnet Yodlee, said these welcome changes are in the best interests of Australian consumers and the economy, as they will enable a “living” fintech industry.
“We are encouraged by the Treasury’s intention to reduce barriers to entry and support participation in the open banking space and open data,” Ms. Berglund said.
“Good examples of the benefits of open banking are the incredible innovation that our partners, like Raiz and 86,400, have introduced. “
How consumers can use their data
In addition to additional business benefits, the rules will allow consumers to continue to control their data while having more options over how they disclose their data.
Specifically, consumers will be able to more easily and securely share their data with certain trusted professionals, including their accountant, tax agent, financial advisor, financial advisor or mortgage broker.
Consumers may also disclose limited information about data outside of CDR for specific purposes, such as verifying their identity.
Finally, the changes will simplify the data sharing process for consumers with joint accounts by allowing each account holder to consent to the sharing of account data, while maintaining control and transparency for all account holders.
The latter measure will begin on July 1, 2022 to allow for an appropriate implementation period.
CDR will control what data is shared, for how long, with whom and for what purposes through the protection of consumer privacy and safety.
According to the Treasury, it encourages businesses to compete and innovate, and makes it easier for households and small businesses to choose financial products.
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