Legislation is being scrutinized by the senate to expand the consumer data right (CDR) to include action initiation, which could allow consumers to instruct fintechs and service providers to take specific actions with their permission.
This would provide a safer and more secure method than screen-scraping, which fintechs previously used to perform these actions. The draft legislation has passed the lower house and is currently under review by a senate committee expected to report by early May 2023.
The expansion of the CDR would enable Australians to instruct accredited organizations to take action requests on their behalf. This would reduce complexity, time and cost for consumers and drive innovation and competition.
Treasury recently hosted a Payment Initiation Workshop to discuss and understand prospective use cases with the CDR community, the ACCC, DSB, Office of the Australian Information Commissioner, and Treasury. Examples of use cases involving the new payment powers could include a single aggregated view across accounts at different banks with the ability to manage and initiate payments and an app that moves funds to optimize interest rates and avoid fees.
Once legislation passes, the assistant treasurer and minister for financial services will declare the types of actions that can be initiated under the CDR, and the ACCC will regulate any fees that can be charged for processing payments and other types of actions.