Before it passed with bipartisan support, Zepto's Emily Curlewis was in Parliament House with reps from the fintech community advocating for the Treasury Laws Amendment [Consumer Data Right] Bill 2022.
In this article, Emily describes what went on behind the scenes and why the bill is a big deal.
Canberra is busy during parliamentary sitting weeks.
With politicians, their staff, industry bodies, special interest groups, businesses, unions, not for profits and a raft of others in town and primed for action, there's a buzz about the place. I wouldn't say it's a circus. More carnival than circus, perhaps. Although, maybe there's a bad joke about clowns a few sentences back.
I spent sitting week in Parliament House with Fintech Australia CEO, Rehan Mark D'Almeida, Intuit's Simeon Duncan [Senior Manager, International Corporate Affairs], Skript CEO & Co-founder, Eric Tsang, WeMoney's Dan Jovevski [CEO & Founder], and Co-founder of Upworth, Alexandre Chavotier. As a united front of leaders representing the fintech community, we met with politicians and policy-makers to advocate for the passage of the Treasury Laws Amendment [Consumer Data Right] Bill.
Why were we advocating for this so vociferously?
Because we believe the bill is a crucial step forward in the implementation and enhancement of the CDR framework, vital for fostering innovation, competition and consumer empowerment.
The creation, delivery and evolution of the Consumer Data Right [CDR] hasn't been plain sailing. There have been technical headwinds and choppy water stirred up by stakeholders. In July, on the day of the CDR industry's premier annual event — Fintech Australia's CDR Summit, the Australian Banking Association [ABA] published a media release critical of the CDR regime. It revealed findings of a strategic review undertaken by Accenture into the roll-out of the CDR regime.
The findings included that, in addition to significant government investment, the banking industry has invested around $1.5b into CDR since 2018. And that, at the end of 2023, only 0.31 per cent of bank customers were using the CDR.
Because we believe the bill is a crucial step forward in the implementation and enhancement of the CDR framework, vital for fostering innovation, competition and consumer empowerment.
The creation, delivery and evolution of the Consumer Data Right [CDR] hasn't been plain sailing. There have been technical headwinds and choppy water stirred up by stakeholders. In July, on the day of the CDR industry's premier annual event — Fintech Australia's CDR Summit, the Australian Banking Association [ABA] published a media release critical of the CDR regime. It revealed findings of a strategic review undertaken by Accenture into the roll-out of the CDR regime.
The findings included that, in addition to significant government investment, the banking industry has invested around $1.5b into CDR since 2018. And that, at the end of 2023, only 0.31 per cent of bank customers were using the CDR.
“Despite the best efforts of Government, regulators and industry, this review makes it clear that CDR has not realised its potential. Australians have enthusiastically embraced digital innovations in banking such as mobile wallets and PayID, however uptake of the CDR has been comparatively low. It’s time to go back to the drawing board. The current CDR regime isn’t delivering for customers or enhancing competition and a new pathway forward is needed.”
ABA CEO, ANNA BLIGH.
Further, at a Committee for Economic Development of Australia event in August, the Assistant Treasurer Stephen Jones described the CDR as a "good idea, badly executed" and in need of a reset.
We believe deeply that a key piece of the way forward to delivering on CDR's potential is 'action initiation'. Action initiation expands the CDR from a data-sharing scheme to allowing consumers to authorise accredited third parties to carry out actions on their behalf — actions like opening or switching accounts and providers, making payments and updating personal details.
The bill amends the Competition and Consumer Act 2010 to establish these 'action initiation' reforms, and we are delighted that it passed with bipartisan support.
There are many reasons for the CDR's low uptake, and there is work to be done — particularly in educating Australian consumers about its benefits and utility. In early 2022, Zepto conducted robust research into Australian consumers' appetite for open data regimes like the CDR. That research showed that Only 18% were comfortable with the concept of having their personal data shared with third-parties. This was driven by consumers lack of trust about data privacy, security and potential identity theft.
The only reference point many Australians have with 'sharing data' is with the malicious, unauthorised kind.
The Senate Economics Legislation Committee says “this framework legislation will place consumers at the centre of an innovative data-sharing system that protects their privacy”. But, clearly, refinement of how the benefits of the CDR are communicated is required to grow comfort and consideration by wary Australian consumers. We believe that engaging consumers with simple, relatable CDR use cases that deliver tangible customer benefits will build trust. The potential upside to hip-pockets is as good a place as any to start.
In July, Upworth released a white paper arguing Australians are missing around $30 billion in interest earnings annually due to hidden complexities and biases in the savings account landscape. As a provider of tools designed to empower consumers to make decisions and switch products faster, the Upworth team is a huge supporter of the CDR.
"The Consumer Data Right bill was passed today in the Australian Parliament. A huge win for all of us, that will boost competition and transparency in the banking industry."
UPWORTH CO-FOUNDER, MAXIME CHAURY.
As the first non-bank payments provider Accredited Data Recipient [ADR] in the CDR, Zepto is excited by the potential of the open data to support Australia's rapidly developing, digital economy and deliver better financial outcomes for consumers. Having provided a submission on Treasury's Consumer Data Right draft legislation to enable Action Initiation back in 2022, we are delighted by the successful passage of this bill.
Read more here about our public policy and advocacy work.
I'll leave the final word on all of this to Fintech Australia's Rehan Mark D'Almeida.
"It's a big day for the industry! The passing of the Consumer Data Right action initiation bill in Senate today marks a pivotal moment for Australia further empowering consumers with more control over their data. By fostering a more transparent and competitive landscape, it sets the stage for robust economic growth and digital advancement in the country."
FINTECH AUSTRALIA CEO, REHAN MARK D'ALMEIDA
Like Rehan, we look forward to seeing the CDR reach its potential.
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