Within 12 months Australia’s Open Banking regime is expected to be well advanced, according to the chair of the body responsible for developing the technical standards for Australia’s Consumer Data Right.
And as the CDR framework is applied to more industries, the use cases for consumers and tech companies get more interesting.
“The difference between Consumer Data Right and the UK’s Open Banking is the Consumer Data Right will apply economy-wide,” said Andrew Stevens, Chair, Data Standards Body, Consumer Data Right.
Speaking during the Gartner Data and Analytics Summit in Sydney last week, Stevens explained CDR won’t only apply to banking, energy and telecommunications — the first three sectors to roll out the data-sharing framework.
“It’s an economy-wide Consumer Data Right and therefore the data holders will be many and various. And the data recipients, likewise, will be many and various.”
- Read more: Open Banking Is Just The Beginning – Australian Businesses Must Overhaul Data Practices To Survive In The CDR Era
According to Stevens, two common sources of value created by the CDR have emerged through industry discussions over the past 18 months. The first is the ability to serve customers with much more personalisation, not based on personas but on their actual experiences and transactions. And the second is the aggregation play that emerges as more industries make CDR data available.
“We can put together deals specific to your needs, that are much more finely tuned in terms of this radical level of personalisation. That previously hasn’t been achieved,” he said.
For example, in the energy sector under the CDR, a consumer could send their energy usage data to a solar provider. The solar company can get access to their energy consumption data for the month, or even beyond that, to analyse seasonal patterns. On the basis of that analysis, the solar installer will be able to accurately size the customer’s requirements.
Once this data is combined with banking data, the installer could look at affordability and financing options on top of the energy matching — in effect creating a self-funding solar installation.
“The cross-sector element is what’s unique. Australia is the only regime in the world that has this cross-sector model evolving. And so you can imagine the implications for rulemaking and standard development so that the system is interoperable across the system,” he said.
Speaking to Which-50 after the panel, Stevens said the solar scenario could be commonplace within three years.
Aggregated data access to fintech, energytech, regtech players means “use cases will broaden and deepen.”
“I would expect banking will be quite advanced by this time next year in terms of 150 data holders and a whole range of recipients.”
Open Banking use cases
The first industry to embrace CDR is banking. From July 1 this year, the Big Four banks will be required to share consumer data relating to credit and debit cards, deposit accounts and transaction accounts. Data sharing on mortgages and personal loans will be required on November 1st.
A second wave of 150 banks or “data holders” will follow.
According to Jamie Twiss, Chief Data Officer, Westpac, there are initially two types of CDR use cases in the banking sector. The first is around comparison services and switching, including onboard procedures that reduce friction when switching banks. For example, data like your address book and transaction history will move with you when you set up a new bank account.
The second category concerns financial wellbeing services that use insights derived from consumers’ financial product usage — particularly their transaction history.
Twiss said, “Right now, I think all of the banks are thinking about, how can I take your, in our case, Westpac transactions, and give you some insights as to how you spend your money? What can you possibly do differently?”
“With CDR in place it will be possible for the banks or for third parties do that across everything — all of your bank accounts. I think we’ll see a lot of interesting use cases coming off the back of that in terms of delivering insights.”