Australia’s CDR shows signs of ‘maturing’ as use cases added

Australia’s Consumer Data Right (CDR) has continued to grow, adding new use cases and has entered the “consumer adoption phase”, according to a new report.

The fourth edition of the Australian Open Banking Ecosystem Map and Report, published by Fintech Australia, revealed that 98% of data holders are now active, with 80 of those authorised deposit-taking institutions (ADIs) and 114 data holder brands.

The report identified a 53% year-on-year increase in data recipients, bringing the total to 175 and noted that data recipients now account for 64% of the total ecosystem, up from 47% in December 2022, in a sign of the ecosystem’s growth.

Use cases have grown to 158, with financial services “leading the way”, although the report also found that participants from a more diverse range of industries are entering the ecosystem, including climate and sustainability, philanthropy, and hospitality.

Of those 158, 32 are lending, credit and broking use cases, while 14 are use cases registered by banks and other large financial institutions, and six are climate/sustainability use cases.

It cited as evidence of CDR’s maturity that banks have shifted their focus from compliance and the four largest banks are now active as accredited data recipients, and the fact that data holders have halved the average time taken to rectify implementation gaps since December 2022.

However, the report, which is supported by Mastercard and published in partnership with FinTech NZ, Payments NZ and Open Finance ANZ, stated that work is required to enable more use cases and accelerate consumer adoption.

It highlighted specifically the expansion of CDR to the non-bank lending sector, the passage of legislation to enable action initiation, and the release of details about proposed regulatory reforms to the CDR framework following consultations held by Treasury in 2023.

Brenton Charnley of Mastercard Australia

Brenton Charnley, head of Open Banking at Mastercard ANZ, said the rollout of the Consumer Data Right has reached an important phase and that the next 12 months will be “pivotal”.

“The growth of CDR Representatives, the emergence of new and diverse use cases and the increasing prevalence of intermediaries are all strong signs that the ecosystem is maturing,” Charnley said.

“Although we are now seeing tangible benefits being delivered to consumers, these benefits could be supercharged by thoughtful regulatory reforms – including to facilitate a transition away from screen scraping to the CDR.”

Jennifer Harrison, co-founder of Open Finance ANZ, said: “When Australia started this journey a few years ago, we knew Open Banking would support classic use cases, like account aggregation for saving and budgeting, and bank transaction data for mortgages.

“Now, it’s abundantly clear from the updated data, that the CDR Representative pathway has catalysed a breadth of innovative use cases for payments, sole trader financial admin, family wealth management, digital identity, financial wellness, rewards and loyalty, and more.”

She added: “This is exciting because it signals a shift towards a more dynamic and inclusive financial landscape where consumers can benefit from securely sharing their bank data.”

FinTech Australia announced that future editions of the report will include Aotearoa New Zealand, expanding to become the Australia and New Zealand Open Banking Ecosystem Map and Report.