Government looks to expand CDR functionality

The Albanese government is calling for feedback on draft legislation to expand the functionality of the consumer data right (CDR).

The government said the move would make it easier and safer for small businesses and consumers to carry out everyday tasks online.

“Action initiation will enable consumers and small businesses to take their data‑sharing rights one step further by easily and securely initiating actions like opening and closing accounts, making payments and applying for services through the CDR,” a statement released by the government this week read.

“This will reduce complexity, time and cost for consumers looking to safely get better deals and services that meet their needs, unlock new business models, drive innovation and boost competition.

“The government is now seeking comments on the draft legislation that will establish the overarching framework for action initiation in the CDR, including the obligations of parties (such as fintechs, banks and energy companies) that will handle actions on behalf of consumers and with their consent; updated privacy and consumer safeguards; and the process for bringing different actions into the framework.”

Late last month, Treasury recommended that the CDR be extended beyond banking, energy and telecommunications to include the non-bank lending sector.

In its final sectoral assessment report, Treasury said that extending the CDR to non-bank lending would likely result in significant benefits for individuals and businesses including better service and greater potential for innovation.

It recommended that generic and publicly available information about non-bank lending products, customer information such as contact details and information on the use of non-bank lending products should be subject to CDR data-sharing obligations.

Adatree COO Alex Scriven previously stated that the availability of data under the CDR could provide advisers with the opportunity to create exceptional experiences for their clients.

“You could get rid of the fact-finding process at a few clicks of a button with this new information, along with alerts, triggers, and flags when your clients’ financial circumstances change, or when they can afford a new investment or property, or have enough funds to be able to invest in the ASX,” he suggested.

Submissions on the draft legislation are open now and close on 24 October 2022.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.