“There might be some impact on the speed with which data recipients will have consumer data right products available to consumers, but the government is committed to having CDR accessible as early as possible to assist those businesses which are ready and eager to join,” she said.
“We will let it play out organically. From a consumer’s perspective, I think it will be a slow burn.”
Senator Hume sought to assuage concerns held by some start-ups that major banks might use the start of the open banking regime to stop the practice of “screen scraping”, which has allowed fintechs to access bank data by asking customers to hand over their passwords. She warned banks not to take advantage of the regime starting by restricting access to data via the scraping technique.
“I think the two systems can run in parallel until it becomes perfectly obvious the CDR is the better alternative in terms of security,” she said.
“But we wouldn’t want to disrupt existing business models.”
Big UK banks began sharing data with customers via a similar regime at the start of 2018. Early adoption was slow, but has been slowly building; earlier this year the number of providers enrolled to use the UK open banking system surpassed 200.
The Lord Mayor of the City of London, William Russell, recently described their system to Senator Hume as a slow burn, and she said “I think that is exactly what we should expect here”.
“The point of the consumer data right is to empower consumers, reduce costs, boost competition and improve the customer experience. But that is not something that happens overnight. And it is also not something that customers acknowledge in a short space of time. Sometimes, there is a catch-up phase.”
Asked how the success of the consumer data right should be measured, Senator Hume said consumers would be unlikely to reference the right specifically even when it ended up revolutionising the way services were provided digitally.
“I don’t think people will say, ‘Isn’t my life better now I have the consumer data right’. But they will say it is better now that my banking provider, interest rates, fees and experience have changed. They won’t say ‘Isn’t the CDR great’ but their products will be more suited to them.”
King & Wood Mallesons partner Scott Farrell is preparing a report for Treasury on how the initial “read-only” version of the consumer data right could be made more powerful by adding the ability for data recipients to change data on behalf of customers, and Senator Hume said it was important the development of the right be an iterative process.
“This is not a piece of infrastructure that is a set and forget,” she said. “It continually has to be upgraded and monitored, to keep up with not just the technology but the bright minds creating innovative product offerings with terrific consumer outcomes.
“That is something Australia has been good at for a long time – we have been at the forefront in financial services of innovative product development – but this gives us an entirely new platform on which to do it.”
Source : From the Web