By Brenton Charnley, Head of Australia, TrueLayer Australia and James A Brown, FinTechNZ
Australia and New Zealand share a lot of similarities such as a love for rugby, cricket and pavlova. Now, following The Hon. Dr David Clark’s announcement on 6 July 2021, we also share a common name for an open data access regime we both call the Consumer Data Right.
New Zealand Government documents reveal many similarities with the Australian Consumer Data Right (A-CDR) — you can find them in the Cabinet Paper, Minute of Decision and Regulatory Impact Statement — and the story so far suggests the Aussie experience should translate well to the new Kiwi regime.
The following is a quick guide, based on what we know so far, that compares the Australian and New Zealand approaches side-to-side.
|What we call it in Australia||What we call it in New Zealand||More information|
|ACCC (Australian Competition and Consumer Commission)||TBA||The NZ Government is looking to make a decision by 30 November 2021 on institutional responsibilities. E.g. who will be responsible for the implementation, accreditation and development of technical standards and enforcing obligations.|
|Data Holder||Data Holder||Similar|
|Data Recipient||Data Recipient||Similar|
|Outsourced Service Provider||Intermediary||Essentially similar|
|ADI (Authorised Deposit-Taking Institution)||Banks||Essentially similar|
|CDR (Consumer Data Right)||CDR (Consumer Data Right)||There appear to be a lot of similarities, beginning with the name and continuing with an economy-wide focus.|
If using the term ‘Consumer Data Right’ didn’t give it away already, there are a lot of similarities between the approaches of both Australia and New Zealand.
Similar to Australia, New Zealand’s CDR (NZ-CDR) approach is regulatory driven. That means:
- NZ-CDR adoption will be backed by legislation
- The NZ-CDR ecosystem and its participants will be regulated
- Requests for data, disclosure of data, and security arrangements will be standardised and consent is paramount.
2. Why a CDR?
The stated impetus for the implementation of the NZ-CDR was to “give New Zealanders greater choice and control over their data, enabling greater sharing of consumer data between businesses and promote innovation and competition”.
Similarly, the inquiries into open banking in Australia by banking lawyer Scott Farrell, highlighted the 4C’s behind the A-CDR – consumers, choice, convenience and confidence – and stated goals such as to be customer-focused, encourage competition, create opportunities and be efficient and fair.
3. Economy-wide rollout
New Zealand is looking to introduce the NZ-CDR throughout the whole economy and the Minister of Commerce and Consumer Affairs, currently Dr Clark, will designate which sectors should participate by weighing the risk and requirement of each sector through consultation. This approach was influenced by submissions to a July 2020 discussion document seeking feedback on establishing a CDR in New Zealand, which contained broad support for a ‘sector designation’ approach similar to Australia. Banking is most likely to be the first sector to be designated in New Zealand, as it was in Australia.
New Zealand has already made progress toward open banking via a market-led approach and is still in the very early stages of the regulatory approach.
As a result, a lot of the details are in the process of consultation which, as we know from the Australian experience, means they could be subject to change.
However, we can already identify some interesting pivots New Zealand has made.
1. Action Initiation will be a priority
Unlike Australia, New Zealand is proposing the immediate legislative inclusion of action initiation, or the ability for an accredited person to carry out an action with the consent of a consumer. For example, after opening an account with a new provider the individual can direct that entity to close their old account with the old provider. Whilst recognising the additional risk it brings, New Zealand has also signalled an understanding that action initiation is necessary to support many use cases.
In Australia, the A-CDR is yet to include action initiation, nor is there yet any roadmap to get there, despite many recommendations to do so and Scott Farrell’s October 2020 “Future Directions” report and specific. The Australian Government is due to respond to Mr Farrell’s second report before the end of the year.
2. Accreditation will be tiered
The New Zealand government is looking to introduce a risk-based, or tiered, approach to accreditation, meaning the level of accreditation will be determined by the risks associated with the data to be shared. Whether such a model will be introduced from the start, or be gradually introduced as in Australia, is yet to be seen. However, with a recognition that a graduated accreditation system is a ‘key lever’ for participation by providers, and participation by providers is a vital prerequisite for consumers to access their data right, it is likely such a model would come to fruition faster in New Zealand than has been the Australian experience to date.
3. Mutual accreditation and sharing of systems will be explored
New Zealand has made it clear that in an effort to reduce the implementation costs of the NZ-CDR they will explore using existing data standards developed in the banking sector. Further, New Zealand is exploring mutual accreditation with the Digital Identity Trust Framework, work on which is already underway, through a shared data standards body and mutual recognition between accreditation frameworks.
It is an exciting time for New Zealand to implement its own NZ-CDR and we eagerly await the further decisions around what it will look like to be announced later in 2021 and the introduction of the implementation Bill in Wellington in 2022.