Labor only recently committed to passing the bill after saying it had secured changes to the CDR as proposed by the government and the move has garnered widespread support from the fintech community.
The regime was labelled a game changer by the government that would improve competition and efficiency in the industries it applies to.
The first application of the bill will be in the banking sector with eventual iterations in the telecommunications and energy sector.
The bills passage was welcomed by the Fintech industry with FinTech Australia’s general manager Rebecca Schot-Guppy saying it was a key step in the timeline for open banking.
“FinTech Australia is pleased to see that the consumer data right has passed parliament. It’s a key step towards an Open Banking regime and gives the fintech community certainty around the timeline of its introduction,” she said.
Chief information officer at 86 400 Brian Parker said this would give Australians control of their data and enable them to choose where they share that information.
“Enabled by the Consumer Data Right, open banking promises to unlock new services and features, plus make it easier for Australians to take control of their finances, including switching banks when the time is right,” he said.
Chief executive of neobank Volt Steve Weston agreed saying that the data right was a critical component in the emergence of open banking and it marked a new era for consumers.
“For emerging players like Volt, this creates a more level playing field where customers can quickly determine if there is a better product or service available to them. This will challenge many of the incumbent banks who for too long have taken advantage of customer inertia; offering new customers better deals than loyal customers,” he said.
The new battleground is transparency and trust said Mr Weston and banks will have to offer a clear value exchange to consumers.
“There is work to be done on educating and convincing consumers of the benefits of open banking, and reassuring them that the security and privacy of their data will not be compromised. However, Volt believes customers have the right to own their data, and we are confident these innovations will improve Australians’ overall banking experience,” he said.
Eric Wilson, chief executive of Xinja agreed with Mr Weston and said there was a degree of education that was needed.
“There is a level of education required, consumers will not understand the benefits and are likely to be cynical, so it will take time.
“But the legislation and open banking have the power to drive significant value to customers and accelerate competition in the industry,” he said.
The biggest strength though was how it would drive competition in multiple ways said Mr Wilson, not least that it will be easier to switch than ever before.
“The true competition will not be around products and rates but the level of personalised, data-driven service and banks will be trying to outdo each other - we call this 'the race to the top’,” he said.
Dom Pym, co-founder of Up said the changes would really impact the bigger end of town as most fintechs were already implementing the changes.
“The changes to consumer data rights legislation won’t really make a difference to fintech companies right now - as many of them are fast moving and already providing customers with easy access to and control over their own data.
“It’s the bigger banks who will drive the adoption in the banking industry and will be most impacting by the changes afoot,” he said.
Eliot Hastie is a journalist on the wealth titles at Momentum Media.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).