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A key fintech association in Australia is challenging the country’s regulators to offer more accurate open banking data, as disagreements emerge over how to quantify consumer adoption.

FinTech Australia, the country’s largest fintech association, has challenged a new report which found that open banking has “not realised its potential” in Australia.

Questioning some of the key figures in the report, FinTech Australia said it is time for regulators to step in to ensure that industry has a clear understanding of consumer adoption.

Last week, as covered by 91����ԭ��, the Australian Banking Association (ABA) published a  of the Consumer Data Right (CDR), the legislative framework for open banking and open data sharing.

Authored by Accenture on ABA’s behalf, the review found that overall adoption of CDR data sharing by Australian consumers is “disappointingly low”.

One of the key findings of the report was that, at the end of 2023, only 0.31 percent of Australian consumers had in place an active CDR data sharing agreement.

Rehan D'Almeida, CEO of FinTech Australia, objected to the ABA’s “prominent” use of this figure, arguing that it creates a misleading picture of open banking adoption.

“These are people who are actively connected to the CDR via their bank account and leverage it on an ongoing basis,” he said.

“Currently, use cases for the CDR are primarily in fields such as lending — for example, mortgage brokers accessing data to help assess loans. This only requires single-use access, which is a different metric.”

More instructive metrics, such as total number of CDR users, consents and API calls, are not publicly available, said D’Almeida.

He, therefore, called on the Treasury and the Australian Competition and Consumer Commission (ACCC) to release these metrics, alongside data on usage of new consent types.

“This would enable the ecosystem to holistically measure success, understand the most popular use cases and celebrate the CDR being used to deliver benefits to consumers,” said D Almeida.

The FinTech Australia CEO added that the ABA “did not share” its findings with the association ahead of the publication of the strategic review, despite there being an overlap in their members.

He added that FinTech Australia has an “excellent” working relationship with the banking sector, and is “open to discussing” the ABA’s perspective.

Realising the potential of open banking

Although the CDR underpins a wider project towards open data sharing, FinTech Australia sees its application in financial services as “first and foremost” a cost of living initiative.

The idea is that the CDR can help drive down the cost of financial services for consumers by stimulating competition, improving financial literacy and enhancing customer flexibility.

According to the ABA review, digital lending is currently the fastest-growing use case for CDR data sharing agreements, allowing consumers to share their data to access a wider range of loan offers.

But other use cases that could drive further adoption have yet to be legislated for, said D'Almeida.

Last week, Australia’s Liberal-National Coalition confirmed that in August it will introduce to parliament a bill to enable “action initiation” under the CDR.

If adopted, the bill will allow energy and banking consumers to direct accredited persons to carry out instructions on their behalf.

Such actions could include making payments, opening or closing accounts, switching providers or updating personal details.

Senator Dean Smith, shadow assistant minister for competition, charities and Treasury, is a key sponsor of the bill.

In a  with other shadow Cabinet members, Smith said the bill has spent more than 14 months laying “dormant” in the Senate, while consumers miss out on its potential cost savings.

“With inflation continuing to rise and the cost of living and doing business getting worse, this ‘action initiative’ reform should be a top priority for the Labor government,” he said.

“Promoting consumer choice and greater competition is essential to bringing down prices, and CDR represents a new, secure channel for consumers to control their data and switch to a better deal.”

Another view of the ecosystem

With the CDR framework still a work in progress, and with data on consumer adoption contested, FinTech Australia is also calling on stakeholders to do more to promote open banking and its potential benefits.

“We don’t have full data on consumer adoption just yet,” D'Almeida told 91����ԭ��. “However, we know that the parts of the CDR that are online are being used.

“As more functionality is legislated, we expect further adoption. But not without support from our major banks and policymakers.”

������ published last week, FinTech Australia and Mastercard showed that although adoption data remains patchy, the build out of the CDR ecosystem continues at pace.

Using data from the ACCC, the report states that 98 percent of CDR data holders are now actively participating, comprising 80 authorised deposit-taking institutions (ADIs) and 114 data holder brands.

Moreover, almost 99.8 percent of consumer bank accounts are now connected to the CDR ecosystem, and the total number of CDR data receivers has increased 53 percent year-on-year to 175.

“With use cases starting to emerge, the challenge now is to encourage the capture and sharing of data on uptake and usage in order to quantify the impact of the CDR,” said D'Almeida.

“Current cost of living challenges and higher interest rates make it more important than ever for us to see CDR-enabled products in the hands of consumers.

“We expect the next 12 months will be a period of innovation and uptake as the ecosystem matures, with fintechs continuing to lead the way."