The Consumer Data Right Turns 4 years old!

The Consumer Data Right (CDR) marks its fourth anniversary today. Over these four years, much has changed, sparking considerable debate about the initiative's success.

To truly assess the CDR's impact, it's essential to understand the context of its rollout. While it's true that the CDR launched in July 2020, this initial phase was limited. Only the Big Four banks—ANZ, CBA, NAB, and Westpac—went live with retail consumers' deposit, transaction, and credit card data, and only for sole accounts. The exclusion of joint accounts at launch was a significant limitation.

It wasn't until November 2020 that joint accounts, mortgages, and personal loans became available with the Big Four. Even then, sharing joint account data required approval from all account holders, complicating the consent process.

The remainder of the banking sector only began sharing data in July 2021. The requirement for joint account holder approval was removed in October 2022, which significantly improved the data sharing process. Business accounts had a staggered start as well, with the Big Four banks commencing in November 2021 and the rest of the banking industry commencing in November 2022.

This piecemeal approach meant the CDR for banking only became fully operational in October 2022. Even now, business customers still face challenges in accessing their banking data digitally.

So, while we celebrate the CDR's fourth anniversary today, it's important to recognise that the journey has been gradual and complex, with significant milestones achieved along the way.

The CDR remains a work in progress. While Banking Data Holders now provide over 99% of all available consumer data, Accredited Data Recipients (ADRs) have faced challenges in achieving the same level of activity and engagement.

Currently, 68% of ADRs are actively using their accreditation to offer services, providing innovative solutions and making the most of the data available.

However, 17% of ADRs are accredited but have not yet launched any active services, indicating that there are still barriers to entry and implementation that need to be addressed.

Moreover, 15% of ADRs have chosen to surrender their accreditation altogether, highlighting the need for ongoing support and perhaps adjustments to the framework to better accommodate the needs and capabilities of potential service providers.

New Accredited Data Recipients (ADRs):

Australian Mutual Bank Ltd - has been accredited as an ADR; as yet, they do not have an active Software Product.

Biza.io - Biza a major provider of Data Holder solutions has launched it’s first Software Product, titled Biza VTT.

Middle Technology Australia Pty Ltd - another new ADR that has yet to start collecting data.

Nano Home Loans Pty Ltd - providing customer onboarding and decisioning data that has not yet started collecting data.

ADR’s who surrendered their accreditation or are no longer active:

CBA - who initially offered a software product titled “Money Management”, later removed it from the registry.

Bud APAC Pty Limited - surrendered its accreditation without going active.

Payble - Another early adopter in the CDR has exited with Payble surrendering its accreditation. This means that the Payble software product “Payable” has also been removed.

PayOK - a provider of bank account verification tools, has surrendered its accreditation to the CDR. As a result, the PayOK Software Product “Bank Account Verification” has also been removed.

Regional Australia Bank - having sold its MyCDR Data software product to Cuscal, has removed all its software products.

Trends

The growth of Software Products and CDR Representative Arrangements continues to be a significant trend in the CDR landscape.

Personal Finance Management (PFM) remains the leading service offering, again for the 4th year, with 10 active Software Products. Frollo is still at the forefront of PFM solutions with its Frollo app, which has been white-labelled for several banks, enhancing its reach and impact.

Lending has seen substantial developments, particularly with NextGen launching Finance Passport for Mortgage Brokers. Several major banks have begun accepting the Finance Passport output for mortgage applications, indicating a shift towards more streamlined and data-driven lending processes.

However, data quality issues persist as a major pain point for Data Holders, affecting both consumer data and product reference data. Addressing these issues will be crucial for the continued success and expansion of the CDR ecosystem.

Looking ahead, I’m hopeful that by the time the CDR turns 5, we will see greater consumer uptake and more widespread use of the available data and services.