Latest news with #ConsumerDataRight
News.com.au
01-05-2025
- Business
- News.com.au
New CDR rules give power back to the people, as well as fintech lenders
CDR flips the power back to the people Non-banks get their shot from 2026 Fintechs gear up for a fairer fight Back in 2019, Australian lawmakers kicked off something called the Consumer Data Right, or CDR. The idea was to give everyday Aussies the power to take back control of their personal financial data. Instead of banks and big institutions hoarding all the information, the CDR means people can choose to share them safely with trusted providers to get a better deal – whether that's on loans, power bills, or other services. It officially launched in mid-2020, starting with the big four banks. Since then, it's been rolled out to more financial players and even other industries. For consumers, the CDR has literally changed the game. If you're chasing a loan, for instance, you can now share your bank data directly with a lender who's signed up to the CDR framework. It means you can tell your bank, "Oi, send my data to this lender I actually want to deal with.' This allows those lenders to see your real financial habits, not just a credit score or a payslip. They can then make sharper decisions, and you could potentially score a better deal. And because the information is real-time and accurate, lenders can make quicker decisions, and the chance of defaults is lower, making everything run smoother for both sides. CDR to be expanded to non-bank lenders Now, the Australian Government is taking things even further. In a move announced last month, they've committed to expanding the CDR to non-bank lenders by mid-2026, opening up a whole new world of options for consumers. This is part of a much bigger plan to 'reset' the CDR and give Aussies more control. Stephen Jones, the Assistant Treasurer and Minister for Financial Services, said that 'uplifting' the CDR will 'deliver a better deal for more Australians.' The idea is to make sure that not only the banks, but also credit unions, fintech lenders, and buy-now-pay-later (BNPL) services, all get a piece of the action. By mid-2026, the CDR will include non-bank lending products like personal loans, car loans and even reverse mortgages. Tap straight into customers' data This will bode well for fintech lenders on the ASX. This includes companies like Plenti Group (ASX:PLT), which has surged in 2025 with record loan growth in Q4 and booming cash profit. Then there's Wisr (ASX:WZR), which is eyeing a 90% loan surge as AI powers 80% of its loan processing. MoneyMe, meanwhile, has powered past $1.5bn in its loan book, with originations up 65% and strong credit shaping a leaner, smarter portfolio. But these fintechs don't currently have the same access to real-time financial data that banks do, and that's where the expanded CDR comes in. Come mid-2026, the CDR will let MoneyMe and these other non-bank lenders tap straight into the financial data of consumers, data that until now has mostly been kept behind the walls of big banks. They can then potentially make faster, more accurate decisions about who qualifies for loans and under what terms. More muscle to compete But it's more than about speed. The CDR also opens the door to personalising loan products even more. For example, with MoneyMe now developing new credit card products, access to richer data through the CDR framework could be a game-changer. MoneyMe could look at a customer's actual spending habits, income trends, and even their history with other types of loans. And take car loans, for example. MoneyMe's got its own vehicle finance product called Autopay, while Plenti runs a white-label program called NAB powered by Plenti (NPBP). With the expanded CDR, these lenders could plug straight into a customer's real-time banking data. Armed with this kind of information, they could potentially design products that are better suited to each individual's lifestyle. This move also means that fintechs like MoneyMe will have more muscle to compete with the traditional banks. With CDR's expansion, everyone could well be playing on a more even field.
Yahoo
23-04-2025
- Business
- Yahoo
What is in store for open banking globally?
Since the launch of open banking, it has been positioned as a transformative force in people's lives. It has the power to fundamentally change how people interact with their finances and the industry as a whole. By 2029, it has been estimated that open banking will reach an estimated value of $94.14bn. Even though open banking continues to experience evolution and growth, there are varying levels of adoption and regulatory frameworks across countries that the sector will need to bear in mind to successfully implement it. The UK pioneered open banking and continues to be one of the leaders globally. The country has seen the number of users increasing, with there being 12.09m active users of open banking in 2024 and 223.9m payments made. This is an increase of 72% compared to the year before. As open banking continues to flourish, it is positive to see that the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) have outlined how open banking can expand further in the UK, and also be used in variable recurring payments and e-commerce. With this move, customers will have much more control over regular transactions due to an independent entity overseeing their payments. In a similar vein, the European Union (EU) has also driven their plans for open banking forward. The EU is strengthening their regulation around how customer data is shared with third parties through the revised Payment Services Directive (PSD2). This aims to sharpen open banking innovation and competition within the market. It is important to note that the level of adoption and implementation of open banking is different across member states. Going even further, Australia is integrating open banking with a cross-industry approach by applying this to other industries such as telecommunications and energy. The Consumer Data Right is underpinning open banking in Australia. This regulation is allowing customers to have more control over how their data is shared across industries. However, the US is behind other countries in their open banking maturity. The country has taken steps towards the implementation of open banking, but compared to the UK, EU, and Australia, more can be done. In the US, the Consumer Financial Protection Bureau has finalised the rules which enable customers to transfer their data between financial organisations only. Yet, there are a number of data security concerns which has halted open banking from going much further. Not only that, but it is also unlikely that much, if any progress, will be made on open banking with the current administration in the US. Globally, open banking has seen good growth. It is important for financial services organisations to continue to drive this growth and ensure that they are protecting their operations and customers. At the same time, banks must also make sure that they are furthering innovation and competition in the market through open banking. To do so, financial services organisations must use application programming interfaces (API), which power open banking. With APIs, if a customer gives their consent for a third-party app, such as a budgeting app, to access their financial account data, the API will automatically request permission from the bank to access this data. Once this is authenticated, the customers' data will be shared via the API. With this, the third-party app will then be able to analyse the customers' financial data. This will enable the app to offer insights and perform actions on behalf of the customer, such as making a payment, but this is dependent upon the permissions that the customer has given the app. As with all technology there is a risk that open banking increases the attack surface, and therefore the potential of breaches and cyber threats. As such, to make sure that the bank itself and their customers are protected, all information must remain confidential and should be encrypted. In addition to this, all financial services organisations must ensure compliance with national and international regulations, like that of the General Data Protection Regulation (GDPR) in the EU and UK. There is no doubt that open banking will continue to evolve, so this is a good opportunity for all countries to be learning from one another to perfect their frameworks. Open banking will not only benefit financial services organisations, but also customers. With greater interconnection of financial services, it fosters competition and drives innovation. It is essential for customers to have a clear understanding of how they can benefit from open banking to ensure that it is embraced and continues on the current upward trajectory. Steve Morgan is Global Banking Principal at Pegasystems "What is in store for open banking globally?" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
