The Consumer Data Right – as the name would suggest – is all about giving consumers more control over their data. However, these legislative changes still have a great impact on businesses and with the CDR set to be extended to new industries in the coming months, businesses across the economy need to be thinking about what the CDR means for them.
Scott Farrell, who chaired Australia’s Open Banking review, has publicly said Open Banking frameworks should “be to the benefit of the consumers and businesses in the emerging data economy”.
At its core, the Consumer Data Right inherently changes the way in which businesses need to be looking at their data. In most cases, data has traditionally been considered a business asset, as it is something that is collected and stored by a company as part of various business operations and processes. The Consumer Data Right, however, is all about putting data back into the hands of consumers.
At a time where first-party data is widely considered to be one of the most important commodities any business can have, these major legislative changes could throw a spanner into the works for those who are unprepared, particularly in regards to customers needing to opt in to share data that businesses are already collecting. But by realising what these changes might entail, businesses can prepare for what’s ahead and even look to find ways to turn the Consumer Data Right into an advantage.
There’s also a responsibility on both businesses and the government to ensure the Consumer Data Right actually provides tangible benefits to consumers. The UK’s open banking model – which has been described as a potential roadmap for Australia – has come under fire for failing to live up to expectations.
We now know that the Consumer Data Right applies to the financial services sector, with plans for this to be extended to energy and telecommunications in the near future. There is no reason this won’t be further extended, however, meaning businesses from all industries should be looking at these changes.
This puts data governance as a top priority for any business that deals with customer data. Businesses should be looking at whether or not their data governance covers data access, portability and transparency – which are all about making it easier to move data around and giving users a greater sense of control over their data.
Data portability, in particular, should now be regarded as a must. Similar Open Banking regimes around the world, notably the UK’s, coupled with the GDPR mean data portability is now expected among many consumers. The Data Transfer Project, which was launched as a collective effort by Apple, Facebook, Google, Microsoft and Twitter, has further accelerated this push towards data portability.
For businesses that commercialise their data, whether that is through selling it to other businesses or using it internally, the Consumer Data Right will present new and different opportunities. For example, businesses should be looking at how they can combine data across finance, energy and telecommunication industries, as these will all soon be included as part of the Consumer Data Right. Companies should also look to make strategic partnerships with other businesses to enable the sharing of data in a way that could benefit both businesses and customers. Companies should be looking at how they can use open data right now and get ahead of their competitors.
As the Consumer Data Right is extended to more industries, companies should be looking at how they can make this experience as frictionless as possible in order to stand out from their competitors. Beyond this, banks for example could use open data to provide their customers with automated financial advice and solutions.
Businesses should also be aware of the potential costs that will be imposed in terms of achieving accreditation.
At smrtr, we not only help our partners with their data governance processes as they relate to the Consumer Data Right and Open Banking, but we also work with open data and find opportunities to promote data commercialisation across different industries. Our Identity Graph technology, for example, maps together transactional and profile based datasets from various industries.
By Boris Guennewig, Co Founder & CTO at smrtr