14 December 2021

Address to the FinTech Australia End of Year Member Event


A CDR Carol - Past, Present and Future

Hello everyone - it’s such a pleasure to be able to speak with you at the end of what has been a momentous year. Thank you to FinTech Australia for hosting this festive themed event and for the huge amount of work you and your members have undertaken in helping to shape the future of the Consumer Data Right, or CDR. 

Many of you will have heard me speak about CDR and the government’s digital agenda more broadly. To say much has happened in the last 12 months is an understatement…And with each milestone we have achieved, there is more and more to be excited about moving forward.

It is a year this month…on 22 December 2020, that I was appointed Minister for Superannuation, Financial Services and the Digital Economy - and, amongst other things, I inherited responsibility for the CDR program from the Treasurer. On the 23 of December - the very next day, my first job was to publicly release the Report from the Inquiry into Future Directions for the CDR. 

Although I was familiar with CDR and the government’s agenda in my previous role as Assistant Minister for Financial Technology, those first few months were a baptism by fire. 

So many stakeholders (with very different opinions) and so much already underway… Implementation in Open Banking,…Consideration of implementation in Energy,… And a vision to expand the CDR across the economy, and be recognised as a world leader in unlocking benefits for consumers through a game changing data portability framework. 

Basic guiding principles have helped general decision making around CDR. The first is that genuine partnership is key. The CDR is a project of national significance that can only be successful through collaboration between industry and government. It is vital to identify benefit, avoid duplication and ensure we have a robust and secure framework for all. 

The second, is that CDR’s ‘true north’ - or rather - where its greatest value proposition lies, is where CDR is both a secure and useful system. It sounds simple, but this is the important balance that must be found when considering competing priorities, and the pathway forward.  

Finally - and of course most importantly, when in doubt - ask Scott Farrell. 

As you will no doubt all be aware, Scott was tasked by the Treasurer in 2020 to lead the Inquiry into the future directions of the Consumer Data Right. It would provide recommendations to government to: 

  • Expand functionality; 
  • Ensure it promotes innovation in a manner that is inclusive of the needs of vulnerable consumers; 
  • Leverage CDR infrastructure to support the development of broader productivity enhancing standards and a safe and efficient digital economy; and 
  • Leverage the development of the CDR with other countries developing similar regimes, to enhance opportunities for Australian consumers, businesses and the Australian economy. 

A key focus was to consider how the CDR could be expanded beyond ‘read access’ to include ‘write access’ - enabling customers to direct third parties to apply for and manage products and services on their behalf. It also had to be forward looking, focusing on the future purpose, use and vision for the CDR.

No small task… And no surprise that we got a Report with 100 recommendations in return.

While I’m not going to go through each of these individually with you now, the recommendations can be grouped into four key policy directions:

  • Expand CDR functionality to include action and payment initiation;
  • Enhance CDR data sharing arrangements to support the inclusion of voluntary datasets, expand reciprocity obligations and support growth;
  • Enhance consumer safeguards; and 
  • Pursue opportunities for CDR to complement other advancements in the data economy (for example, Digital ID) to align accreditation and authentication requirements where appropriate and pursue interoperability - both domestically, and abroad. 

As I said, much has happened in the almost 12 months since the Report was released. We have launched a digital economy strategy - which recognises CDR as key infrastructure required to secure and grow Australia’s digital future.

…CDR rollout in Open Banking is gaining momentum, with a total of 91 banks and their secondary brands now sharing data, and over 95 per cent of customers in banking now covered. 

…In October this year we released Version 3 of the CDR Rules. While this may sound basic to some, it marked a key turning point for CDR with the introduction of Trusted Advisers as a class of participant, allowing a consumer to consent to their data being shared with an accountant, lawyer or financial counsellor…

The Rules also provided alternative pathways to participation via sponsor, affiliate and representative models - to allow businesses to partner with each other to participate in the CDR.

The Rules also allowed for a ‘single consent’ model for Joint Accounts - allowing individuals to reap benefits of CDR where not creating new contractual obligations. For example, not having to gain the consent of other account holders each time they want to simply compare products for a better deal. 

This year Treasury also launched consultation to inform a strategic assessment for the economy-wide rollout of the CDR (what a mouthful!) Significant stakeholder feedback - including from other nations ensued.

It highlighted amongst other things, the benefit of a greater ‘use-case’ centred approach, and potentially the designation of relevant data from across multiple sectors (as opposed to simply taking a single sector by sector designation approach), leveraging data already subject to CDR, to ensure maximum consumer value.  

Today, it is my pleasure to be able to say that we are releasing the Morrison Government’s response to the Future Directions Report. 

We are adopting the four key policy directions that I mentioned earlier in the majority. Many of the recommendations in the Report related to statements of principle or design considerations associated with the four key policy directions I mentioned earlier. This being the case, the Government has either ‘agreed’ or ‘agreed in principle’ to 94 of the 100 recommendations. 

We have ‘noted’ recommendations we would like to explore further - such as providing grants to develop products that use the CDR; or aligning the CDR data with similar programs, to support consistency and interoperability of data-sharing across the economy.

By ‘noting’ we are not saying that these are unimportant matters, rather further consideration needs to be given to work already underway, or whether there might be other ways to achieve the desired outcomes in context of what has been achieved to date.  

The three recommendations that the Government has disagreed to, relate to reciprocity. Specifically, reciprocal data-sharing obligations of accredited data recipients (or ADR’s) to include ‘equivalent’ undesignated data. 

This decision has been made on the basis that the sectoral designation process remains the most viable means of expanding the scope of the CDR in a targeted, strategic manner, while balancing industry concerns about reciprocity creating barriers to entry for new CDR participants… Particularly as the CDR ecosystem is growing. 

Implementation of the key policy directions in the Report, in conjunction with other key decisions made this year, will improve the functionality and scope of the CDR. With privacy and security embedded by design, it will provide the confidence for consumers to participate and benefit in ways we cannot even begin to imagine. 

They pave the way for more efficient, innovative products, services and business models that could remove the burden of daily administrative tasks such as frictionless comparing and switching of products; and give consumers greater tools and insight to make decisions right for them. 

From major life decisions such as finding a home, having a child or choosing the right retirement income product. All of these life-events and associated admin (paperwork, services) could be streamlined. Better informed decisions can be made with access to greater data - providing more tailored services, saving consumers precious time and money. 

Imagine consumers being able to instruct third parties to initiate actions on their behalf and with their consent - like a digital life-concierge or power of attorney. Imagine in the future, automating services like investment management, debt management or even transfer of loyalty points based on personal preferences set by the consumer. Or a bespoke health and wellness service that adjusts your weekly grocery delivery depending on your changing consumption and behavioural data. The opportunities are endless. 

The implementation of the Government’s response will enhance Australia’s global leadership position as we grow our world leading data portability system. It will lift the competitiveness of Australian businesses and help us achieve our national goal of being a leading digital economy and society by 2030. 

Indeed, other countries are looking to Australia’s CDR to inform their own approach, including New Zealand, the US, the UK. Canada and Singapore - which provides Australia with much potential strategic and economic advantage. 

Importantly, we will seek to coordinate the implementation of reforms with similar programs with a view to supporting our domestic data market - such as Digital ID and the review of the Privacy Act. I note that another important announcement has been made today - being the release of the Australian Data Strategy, for public feedback. We will closely monitor how the CDR can align and complement these multiple programs of work to avoid duplication and streamline processes as appropriate. 

If one thing is clear to me now, it is that CDR is not a finite end point. It is an ongoing process, an action. It’s basically a verb. We will continue to review the regime and engage closely with stakeholders on the implementation roadmap and prioritisation of these reforms. 

I thank all of you who have contributed to the advancement of the CDR and broader digital economy initiatives. It simply would not have been possible without your involvement. 

Thank you.