Open letter - The real issue with the CDR is execution, not strategy.

Dear Senator,

The real issue with the CDR is execution, not strategy. We urge Parliament to pass the CDR Action Initiation Bill to confirm Australia's commitment to a viable CDR with read and write access as an element of our future digital economy.

The Australian Banking Association (ABA) review of Australia’s Consumer Data Right (CDR) initiative concludes that the CDR regime "has not fulfilled its potential" and attributes the lack of usage to a lack of interest and use cases. While fintechs and banks can agree that the CDR hasn’t lived up to its potential, the cause is where we diverge.

The unworkable data use and disclosure regulations, which impose a bespoke privacy regime on data received by the CDR, have created a significant barrier to its adoption and uptake. This has stifled competition and innovation, undermining the very goals the CDR aims to achieve.

The fundamental issue lies not in the CDR's strategic vision but in its execution. To unlock the full potential of CDR we need regulatory, policy and process change:

1. Execution focus: Parliament should secure a commitment from the Government to review the implementation arrangements for the CDR. This review should include establishing a dedicated implementation entity, prioritising a roadmap for CDR that addresses known issues, and setting meaningful KPIs and targets.

2. Unify privacy regimes and clarify data obligations: The bespoke privacy regime for CDR is a key driver of complexity and unnecessary costs for data holders and ADRs. With Privacy Act reform on the near horizon, there is no compelling reason why the Privacy Act should not apply to the use of all personal information including information disclosed under the CDR. This would vastly simplify compliance, level the playing field on costs, and provide certainty for consumers and businesses alike. Data holders must also be more responsive to issues raised about consent processes and data quality to ensure the reliability and usability of the data.

3. Foster collaboration: Banks and fintechs must work together to focus on the mutual benefits of CDR. We all have customers. This collaboration should drive innovation, creating a digital future where our customers get more personalised, proactive, and seamless experiences. When our customers win, we win too.

By addressing these execution challenges, we can unlock viable use cases and the pent-up demand from Accredited Data Recipients (ADRs). This will enable us to transition away from screen scraping (a win for consumers who seek greater safety and convenience) and shift the focus from compliance to opportunity – driving innovation and competition within the financial services sector, and ensuring Australia remains at the forefront of the global digital economy.

Anthony Baum

Founder and CEO, Tiimely