The customer’s right to innovation

Ensuring Australia has good innovation policies is critical to the future of banking both domestically and for Australian institutions internationally. 

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Innovation in financial technology - fintech - is important to many things we do at ANZ, particularly in our dedicated innovation and investments function ANZi. ANZi invests in fintech startups, builds and launches new companies, and develops relationships and growth opportunities. 

"Consumer confidence from the get go will ensure Australia can gain ground in the digital economy.” 

Through ANZi, the bank has made investments in fintechs like Lendi, the home loan origination platform; Data Republic, a data platform; and Slyp, an interactive smart receipts platform.

When it comes to data, the fuel of such innovation, the consumer data right (CDR) will provide new opportunities for both fintechs and banks and has the potential to provide important benefits to Australian consumers.

ANZ strongly supports the CDR and is working hard to make bank data available through open banking.

We have already made a range of product data available through open banking, enabling third parties to retrieve information about the products we offer. And later this year we will take the first step of making the first tranche of our customer’s data available to third paties – should our customers provide their consent, of course.

But we don’t just support the application of the CDR to banking, we support its expansion to other parts of the economy. Whether it’s the energy sector, or the telecommunications sector we think the CDR can be harnessed to create even more opportunities for consumers.

Currently, the regime currently has one level of accreditation to receive bank data. To get this level of accreditation, entities must prove they can meet a high level of data security. This is appropriate because the data currently in play is customer bank records.

But we also see an opportunity to introduce additional levels of accreditation with lower thresholds.

These additionallevels of accreditation would allow entities to access either less sensitive CDR data or simply insights from data, rather than the data itself.

CDR in use and how lower levels of accreditation regime might work

To be eligible for a new home loan insurance offer by a service provider, a customer needs to demonstrate they have been current on their mortgage repayments for the previous 36 months.

A fintech could confirm this in two ways; both gives them the ability to provide the value add service:

  • First, with customer consent, it could access all of their loan repayment records by becoming an ‘unrestricted’ ‘accredited person’;


  • The fintech could ask an unrestricted accredited entity that holds the data a simpler ‘yes or no’ question about whether the customer has been current on their mortgage repayments for the previous 36 months.

In this second scenario, the data is still quite sensitive and requires a level of security but it is clearly not as sensitive as having access to all of the customer’s data. The benefit of having multiple levels of accreditation is that the level of regulation is calibrated to the level of risk.

Where entities pose less risk to customers, they would be subject to lower levels of regulation.

Of course, the customer’s consent will continue to be paramount.

Considerations around consent have been an important discussion topic as the implementation of Open Banking and the CDR progresses.

The approach has to balance the need to help consumers understand they are sharing sensitive information while simultaneously trying to make that process relatively streamlined so it can benefit customers.

It is critical to its success that consumers develop faith in the CDR. Australia will have a hard time gaining ground in the digital economy if it doesn’t have consumer confidence in deployment of the CDR across sectors. 

Changing consumer behaviour takes time and confidence from the get-go is critically important. If we look at the UK, for example, although open banking has been alive and kicking for a number of years, the rate of take-up has only recently picked up

In Australia we have taken a very different tack to the UK by saying we believe  in broad application of the CDR to to enable a digital economy across the board, not just in banking, and we believe data-sharing across sectors is a really important bedrock of that. And that’s precisely why consumer consent is so important.

As we move more towards that services economy it raises a really high bar on where consumer trust goes. That needs to be earned.

Emma Gray is Chief Data Officer at ANZ

Gray delivered an expanded version of these comments in her opening statement and answers to questions at an appearance before the Senate Select Committee on Financial Technology and Regulatory Technology

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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