The Australian Government introduced Consumer Data Right (CDR) in 2017, giving consumers greater access to and control over their data.2 CDR was first applied to the banking sector in the form of open banking, which allowed you to share your information with a trusted third party or service provider of your choosing, like your bank.
So, open banking is effectively just what we call the application of the CDR to the banking sector. The CDR will expand to the energy and telecommunications sectors in coming years, so we may soon see ‘open energy’ and ‘open telecommunications’.
George has a home loan with one bank but is curious to know if he could save money by switching to a different provider.
The new provider can give George a quote but requires him to enter a lot of information about his current loan, all of which is with his existing bank.
George doesn’t know the information off the top of his head and knows it would take a significant amount of time to obtain and collate it all. By opting for open banking, he can easily share the relevant data with the new provider.
In the long run, George saves time on the application and finds that he could be saving money if he switched lenders.
No, open banking doesn’t cost the consumer any money, at any stage. There are no fees or charges for transferring your banking data, and an accredited third-party data recipient can’t charge you to receive your information from an accredited data holder.
Open banking could actually stand to save you money, by making it easier for you to compare your options within the market and find a cheaper or better-value product for your needs.
The ACCC has outlined several data standards, rights and guarantees with regard to open banking, which are designed to protect consumers and must be adhered to by accredited providers. A provider must make the following clear on their app or website:
You must also be able to easily manage your consent across all data points, providers and recipients, as well as withdraw from open banking entirely at any time.4
If you have a joint account, both account holders will need to provide consent in order to share information relating to the account. If you want to share data or make requests on behalf of the other account holder, they’ll need to provide consent for you to do this on their behalf.
You can stop sharing your data via open banking at any time. If you do change your mind and withdraw your consent, the provider receiving your data must stop using it, delete it (unless it is already on file with them as part of a credit application) and deidentify any information they had previously obtained.
You’ll generally be able to stop sharing data through the third party’s service or the original provider’s website or app. As the process for doing so can vary between providers, it’s best to verify the appropriate steps with them.
It’s also worth restating that third parties can only store your data within the timeframe you specify. So, you may want to consider putting an expiry date on your consent, saving you the effort of having to manually withdraw your consent in future.
If you think your data has been compromised through open banking or that your data privacy has been breached, your first point of contact should be your provider. If they don’t respond after a formal complaint or you’re not happy with their response, other help is available.
For example, the Australian Financial Complaints Authority (AFCA) can help you with free and independent dispute resolution, and there’s also a dedicated CDR complaint form which you can submit online.
Open banking isn’t unique to Australia and has already been introduced in the United Kingdom and European Union.5 However, it’s not an international system; if you have an Australian account, you’ll only be able to share your data with accredited third parties within the country.
Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).
Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.
1 Australian Banking Association. Open Banking. Accessed April 2023.
2 The Australian Competition and Consumer Commission. Consumer data right (CDR). Accessed April 2023.
3 Australian Government. What is CDR?. Accessed April 2023.
4 Australian Government: Consumer Data Right. Your rights. Accessed April 2023.
5 Parliament of Australia. ‘You’re more likely to divorce than switch banks’: will Open Banking encourage more switching? Accessed April 2023.