In late 2017, Australia introduced a consumer data right (CDR). Overall, this right aims to improve consumers’ experience in selecting products and services by offering greater transparency and access to data. The Australian Competition and Consumer Commission (ACCC) is the lead regulator for the CDR and they establish the rules which govern the CDR. This article will provide a brief history of the CDR and explain how they might benefit consumers or your business.
What is the CDR Changing?
Previously, the extent to which individuals and businesses had access to information and data history was minimal. Generally, people could only access recent account statements or bank transactions, providing little information or scope for comparing products. Currently, the ACCC is developing the CDRs to empower consumer decision making and is trialling it in the banking sector. This will begin with the introduction of the new approach to banking data transparency, known as Open Banking.
What is Open Banking?
In the Open Banking framework, the following information and opportunities will be available from mid-2019:
- spending information;
- deposit and credit account transactions;
- basic product information;
- more data on credit card, debit card, deposit and transaction accounts, and mortgages will become available; and
- consumers will be able to share data with trusted banking service providers if they wish. Consumers will be able to access all data about them held by businesses and direct that data to flow to trusted third parties, such as comparison websites.
Open Banking is not mandated. Rather, it is optional for consumers as to whether they wish to engage with the CDR, compare providers and switch. Therefore, you should note that the CDR will work in conjunction with current data and privacy laws. This means that the existing privacy rules and frameworks will remain the primary way of regulating privacy.
Regulation of the Consumer Data Right
The CDR will be regulated by dual regulators, being the ACCC and the Office of the Australian Information Commissioner (OAIC). The ACCC will focus on promoting competition and the consumer’s well-being by providing consumers with tools to navigate this increased data transparency. Meanwhile, the OAIC will balance consumer’s heightened information access against privacy protections. Details of the regulation include:
- technical standards as to how to present data to consumers. Suppliers’ obligations will be enforced—and suppliers will be punished if they do not meet standards;
- accreditation of third parties;
- consumer education;
- keeping consumers up to date about the CDR’s implementation; and
- the Treasurer will guide the development of the CDR, and the Government will take learnings from the Open Banking Review.
How a Consumer Data Right Might Benefit You
Access to data is essential to anybody owning or thinking about starting a business. If you are a business owner, no doubt you are aware that data can be a tool used to calculate, plan, experiment and speculate to inform your business decisions. As such, the implementation of the CDR is likely to have the following impacts:
- promoting competition between service providers, and therefore a lowering of prices;
- providers will develop innovative products and services tailored to consumers’ needs; and
- small businesses with tight budgets may benefit from the CDR by comparing and selecting tailored service providers.
Future of the Consumer Data Right
The intention is for the CDR to eventually be a right available in all sectors that it could benefit. Following the Open Banking framework, the energy telecommunications sectors will follow. Future sectors to which the CDR will apply will be based on the ACCC’s involvement in Open Banking and its perception of the industries which will benefit from the transparency the CDR provides. Additionally, the Government is encouraging individuals, businesses and any banking customers to participate in a Review of Open Banking. This is a proactive measure to collect various opinions on how Open Banking might impact the entire banking sector.
Over the next few years, CDRs will be implemented across a range of industries. Above all, these rights will equip consumers with greater tools to make more informed decisions. Therefore, a small business owner may benefit from this greater transparency by having an increased understanding of their target market. Overall, this should allow you to provide more tailored services. Consequently, if you require assistance navigating through these consumer regulatory changes, get in touch with LegalVision’s competition lawyers on 1300 544 755 or fill out the form on this page.
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