Fintechs optimistic as open banking finally opens up
The introduction of the Consumer Data Right three years ago aimed to give consumers power over their data and help negotiate better banking and energy deals. Is momentum finally building?
'Open banking', and indeed the whole idea of consumers having control of their own data, is an obvious fillip for competition. But in Australia, the Consumer Data Right (CDR) regime that's facilitating more transparent data sharing seemed to have stalled. The government had gone quiet, and the banks — who already had their own data — weren’t too fussed.
In essence open banking, and open data more broadly, allows consumers to access their data from an institution and share it with a rival, making it easier for companies to compete for business with more detailed knowledge.
Those banking on CDR to fuel their business models and growth, notably fintechs, believe 2024 is looking better. Not least because the Australian Competition and Consumer Commission seems to be taking a greater interest.
The government is also responding, most recently to address issues like sharing data with accounting platforms (as bookkeepers were not accredited to receive data). In December, changes to the CDR rules took effect to provide greater flexibility for businesses. However compliance challenges remain.
