Currently Australia’s CDR only allows data sharing (also referred to as ‘read access’). In the EU and the UK, organisations are also able to initiate actions – make payments, transfer funds and help customers switch accounts – also referred to as ‘write access’ or, in Australia, ‘action initiation’. Many of the most compelling customer propositions are dependent on this capability.
The recent inquiry into Future Directions for the Consumer Data Right recommended Australia adopt ‘action initiation’. Survey respondents commented this would ‘enable far greater value generation’ and have a ‘much bigger impact’ on consumer participation in data sharing under CDR.
The survey also highlighted a paradox at the heart of Australia’s CDR. Lack of customer data for CDR-enabled products and services was cited as the main barrier to developing propositions which use CDR data.
Organisations are not building propositions which deliver value to consumers because of a perception of a lack of customer demand. Customers are not demanding to share data using CDR because of the lack of valuable propositions enabled by data sharing.
Building on a foundation of trust, data sharing has the potential to improve consumers' experience with applying for or changing products and services. It allows organisations to provide personalised, tailored experiences for consumers. Organisations should not forget people who have changed service provider, or were intending to change service provider, were 50 per cent to 75 per cent more likely to be familiar with open banking than those who were not considering changing provider.
In addition to unlocking customer benefits by enhancing customer experiences and delivering greater value, data sharing also provides organisations with an opportunity to improve process efficiency, reduce costs and create new revenue streams.
The survey shows some of the most exciting new propositions to arrive in market will come from challengers and non-banks. Of the 55 per cent of our survey respondents with CDR propositions currently ‘in design’ or ‘in build/testing’, almost three-quarters of those (71 per cent) were non-banks, including several price comparison groups, fintechs and technology and data providers.
Open banking will be followed by the energy and telecommunications sectors. With a target of a new sector assessed and designated each year open finance may be next, with loyalty schemes and digital platforms also under consideration.
As more sectors are designated, Australia will move closer to realising the original vision of CDR being an economy-wide initiative. The key challenge is whether organisations are innovative enough to create propositions customers value.
Paul Wiebusch is an Associate at Quill Peak
Field of Dreams: Build it and they will come was written by Paul Wiebusch in collaboration with David Giddy of Quill Peak Consulting, Robin Scarborough of Studioworks and Jamie Leach of Open Data Australia