The Government has released for public consultation the second version of a draft Designation Instrument for the application of the Consumer Data Right to the banking sector (Open Banking).
The Consumer Data Right will provide consumers with the right to access data relating to them held by a business or to direct that it be transferred to a trusted third party.
There will be strict requirements to ensure that the customer consents to the sharing of their data:
- An accredited data recipient will be required to obtain a consumer’s consent to collect and use that consumer’s specified CDR data for a specified purpose, either once or for a specified continuing period of not more than 12 months.
- A data holder will be required to obtain a consumer’s authorisation to share that consumer’s specified CDR data with an accredited data recipient either once or for a specified continuing period of not more than 12 months.
It is still proposed that from 1 July 2019 the four major banks have access to product data for credit and debit cards, deposit accounts and transaction accounts with access to consumer data from 1 February 2020.
Materially enhanced information
The second stage of consultation responds to concerns raised in the first stage of consultation regarding data which has been materially enhanced.
The concept of materially enhanced information refers to data which is the result of the application of insight, analysis or transformation of data to significantly enhance its useability and value in comparison to its source material. The intention is that information whose value has been largely generated by the actions of the data holder will be carved out by the ‘materially enhanced’ test. Data holders may not be required to disclose materially enhanced data under the CDR, but nonetheless may be authorised to disclose it through the CDR if they so wish.
The Designation Instrument includes an example list of banking data sets that are not materially enhanced, while the explanatory statement includes an example list of data sets that are materially enhanced. Treasury is specifically seeking examples to add to each of these lists.
The CDR can be applied to data that relates to individual consumers, as well as business consumers – such as a customer’s banking transaction data. It can also be applied to information on goods and services on offer – such as the pricing and terms of all mortgages on offer.
Data that can be shared
For Open Banking, the data that a customer can ask to share will include:
• data the customer has provided to the bank;
• transaction data such as records of deposits or withdrawals, interest earned or fees and charges;
• account balance data; and
• product data about the pricing and terms of products.
This will apply to a broad range of accounts, including savings accounts, transaction accounts, credit card accounts, mortgages, and other loans.
The Open Banking Review recommended that as a general principle only collected data (e.g. raw transaction data) and immaterially derived data (e.g. calculated account balances, interest rates and interest accrued on accounts, eligibility of a customer to obtain an account) should be subject to mandatory rights of access. However, it stated that in exceptional cases the regime should be able to apply to materially value-added data sets (e.g. outcomes of Know Your Customer assessments).
Examples of derived data that are within scope and are not treated as materially enhanced include:
• identifiers, including in relation to any persons, accounts, products, transactions, authorisation;
• classifications, according to categories commonly used throughout the banking industry in relation to online banking, such transaction types (e.g. payments, receipts);
• reference numbers, such as routing numbers, clearing house numbers, swift codes;
• calculated balances including the total of an account;
• interest earned or charged;
• fees charged;
• eligibility of a customer to obtain an account;
• expected amount at maturity;
• data on authorisations, including direct debit authorisations;
• transaction descriptions; and
• filtering or sorting by timing, amounts, classifications.