Exploring Consumer Data Right in Australia: A Conversation with Mr Open Banking and Jamie Leach

The following article is an adapted transcript based on the audio recording of Season 5, Episode 3 of the Mr. Open Banking podcast, which Ozone API are proud to be sponsoring. The audio version is available here.

In the open banking community, it has become commonplace to expound that open banking will lead to open finance, and that open finance will lead to open data. In fact, this transition is already taking place. In Brazil, open insurance has been live for years. In the U.K., an open energy project is already underway. But talk of the march towards open data would be incomplete, even unthinkable, without addressing the pivotal role of Australia.

Although their regulatory efforts came after their peers in the U.K. and Europe, they did not call their new regulation a payments directive or even open banking. They called it the Consumer Data Right, or CDR. Marking the first time open banking legislation was used to shine a light down the road we had all begun to walk.  

Unfortunately, despite starting with such bold ambitions, reality has fallen far short of the vision. Sometimes, all that glitters is not gold.

A Conversation with Jamie Leach, Open Data Strategist at Raidiam

Jamie Leach was recently hired as Raidiam’s Open Data Strategist to strengthen the company’s authority in Australasia and Asia Pacific. A self-proclaimed data champion, she is also the Regional Director of FDATA Australasia, and the founder of Open Data Australia. Jamie also serves as a Strategic Advisor to Smarter Contracts and is the Board Chair at Grid Cube. As a staunch advocate for effective data policy, she provides regular advice and support concerning data strategy, privacy, and governance to clients from both public and private spheres. 

With a strong background in finance and economics, Jamie is dedicated to empowering data owners and users alike, by contributing to technological advancements in digital identity and open finance. 

In the early days, the sky was the limit 

Starting in 2018, with an ambitious plan in place, the Australian Competition and Consumer Commission (ACCC) proceeded to introduce consent-based data sharing to the entire economy, one sector at a time. Then Prime Minister, Scott Morrison, commissioned a review of which Scott Farrell was made chair. Farrell reviewed a number of jurisdictions and came to the recommendation that not only would open banking be good for Australia and its citizens, but that it would also give the country the potential to leverage its data. This led to the creation of the Consumer Data Right: Australia’s path to an open data economy.  

It was an exciting time for Jamie Leach, who had been fighting the open data fight in Australia for a number of years. As she told Eyal, “I once asked Scott, ‘why did we want to introduce a consumer data right, as opposed to open banking?’ Scott argued that if we brought in consent in the middle of the Consumer Data Right, it would afford, through legislative reform, the ability for a consumer to, in theory, direct what data was shared with him for what was considered an acceptable purpose.”

In its original form, CDR was intended to touch every sector. First banking, then energy, then telecommunications, and all the way to pensions and non-bank lending. But as Jamie admits, “That was the intention and where it ended. Who knows?”

Farrell, to use a sports analogy, had swung for the rafters. And Jamie believes he actually hit it out of the ballpark. “But there’s a big difference between the starting point and where we have gotten to now, sadly,” she adds.

First banking went live in 2020, and then energy in 2022. For a brief moment, it seemed like the dream of broad data rights may actually come to pass at the first attempt. 

“Think of it like a duck paddling on a lake from the outside,” says Jamie. “The duck seems to be gliding effortlessly around the lake, but if you look underwater, they are usually paddling really hard.”

Banking as a data set turned out to be quite complex. “If you add to that years of transactional data with many, many, many different data points, it gets very deep, very broad. It can be challenging.”

Eventually, there was a change of Government which brought about new questions. Next, pressure came from subsequent sectors who started lobbying for what should or shouldn’t be included in their data sets. Telecommunications soon dropped off the list, followed by retirement pension accounts, and eventually the second phase of open banking. 

Two years of development work was set aside, and the Government announced that it would restart consultations with each sector. “To be honest, that is when the feeling that this was potentially never going to see that whole of the economy rollout was really reinforced,” Jamie says.

No fintechs or consumer advocacy groups were involved in these conversations.

“When you start to design systems behind closed doors, you really start to limit those governance issues. You start to colour and flavour what that data economy looks like. And I do think Australia was very much impacted by decisions such as that.” 

Today, the Consumer Data Right in Australia has stalled. These stumbles have caused many Australian stakeholders, regulators and market players alike, to take pause, and re-assess whether the idea of CDR is worth their effort. 

A glimmer of hope

At the same time, glimmers of hope had started to emerge on other fronts with the introduction of ConnectID, Australia’s budding digital ID program.

“ConnectID is an industry led solution that happened to go early,” Jamie explained to Eyal. “They went live before the legislation was finalised. There’s always a risk in that. But they’ve played a very smart game.”

Jamie refers to ConnectID as verified identity as opposed to the sharing of verified credentials. “ConnectID is an opportunity to say, ‘What if there is another entity out there that has already satisfactorily identified Jamie Leach?’ And they could vouch for Jamie Leach. Who would that be? Nine times out of ten, it’s going to be a bank. The other time out of ten, it’s going to be somebody in Government.” An ecosystem that can vouch for individuals based on trusted parties. And according to Leach, it’s going to revolutionise data protection in Australia. 

“The end goal of a true open data economy, I think, is very possible,” Jamie adds. “However, for that to happen our foundation needs to be almost rewritten. We need to rebuild the Consumer Data Right from the bottom up.”

This means simplifying previously approved legislative reform, simplifying the technology around accreditation, and a change of mindset around the addition of subsequent sectors.

“We really need to supercharge the introduction of subsequent sectors, data sets that are shared, and the ability for a consumer to enact data sharing and an action off the back of it. In-line with how quickly consumers are digitising every aspect of their life.” 

The Trusted Digital Identity Framework, or TDIF, has led to a crop of successful market players like ConnectID. Their efforts have started to chip away at the two other pillars of open banking: Digital ID and Payments. Triggering hope that perhaps this success can rejuvenate the CDR, and recalibrate the relationship between market and regulator.

Australia’s success should be celebrated. They are trailblazing the road to data rights. And if they succeed, they will have set the course towards a brighter future.

Learn more about Jamie and her work on LinkedIn.

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