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Aussies forge ahead with consumer data right, digital identity push

Peter Griffin, Contributor. 01 October 2020, 10:27 am

An A$800 million digital push to be announced in Australia's federal Budget next week, including funding to expand Australia's open data regime beyond the banking sector.

The Consumer Data Right was launched across the Tasman on 1 July, giving Australian consumers ownership of their banking, energy, phone and internet transactions, the right to control who can use it and the opportunity to transfer data to another provider.

The aim of the regime is to make data portability easier, increasing choice and competition, particularly in industry sectors where a company's use of data is used to lock in customer loyalty. Comparing offerings between providers, using real customer data, would also be easier.

But it is also designed to boost innovation. With a customer's data finally unlocked, the hope is that innovative new applications and platforms will spring up, merging data from numerous different sources - with the consumer's permission.

The Australian Budget will grant AU$28.5 million to roll out the CDR in the banking and energy sectors with a plan to extend it to mortgages and personal loans by the end of the year.

The CDR has had a low-key launch so far in Australia, with the Covid-19 pandemic requiring financial institutions to divert resources to more pressing issues. But the four major banks were ready for the July 1 introduction and numerous smaller financial institutions have been preparing their systems for CDR as well.

In contrast, New Zealand is a few years behind. The Ministry of Business, Innovation and Employment just last month issued a discussion paper on a data right and a call for submissions, which close on October 19.

Starting with banking

With the big four Aussie banks major players in our own market, a staged approach drawing on the work already done in Australia's financial sector would seem to make sense if a CDR was introduced here.

It's yet another area of regulation related to data and digital platforms where Australia is forging ahead, with the federal government and competition watchdog introducing a law to criminalise the spread of extremist content and creating a mandatory code of conduct for Google and Facebook to share advertising revenue with news publishers.

But Budget 2020 also reveals areas where our own efforts are far ahead. It includes A$256.6 million in funding to roll-out across government an opt-in digital identity that would allow Australians to verify their identity once to gain access to over 70 government services.

New Zealand's RealMe service has for years offered online verification and log-in for a range of government departments - for paying tax and renewing a passport to lodging resource consents and paying rates bills with local councils.

A digital log-in is already in place in Australia and used by 1.6 million Australians and 1.16 million businesses. The funding will extend the system's capabilities. 

"We need our businesses to be online, we need them to be digital businesses," Prime Minister Scott Morrison said on Tuesday.

"In recent months we have seen through COVID a rapid acceleration produced by necessity of businesses really engaging and upgrading their digital capability. What we're announcing today, will build on that. It will strengthen it and it will accelerate it."

Australian Budget digital initiatives funding pre-announcement includes:

  • $256.6 million to develop a Digital Identity system to enable more secure and convenient engagement with government services, and in future, the private sector. Digital identity is already being used by over 1.6 million Australians and 1.16 million businesses to access over 70 government services.
  • A further $419.9 million to enable the full implementation of the Modernising Business Registers (MBR) program, allowing businesses to quickly view, update and maintain their business registry data in one location;
  • A further $28.5 million to support the rollout of the Consumer Data Right to the banking and energy sectors, which is in addition to the more than $120 million already committed;
  • $29.2 million to accelerate the rollout of 5G, including an initiative to invest in 5G commercial trials and testbeds in key industry sectors such as agriculture, mining, logistics and manufacturing.
  • $22.2 million to support small business operators take advantage of digital technologies through an expansion of the Australian Small Business Advisory Service - Digital Solutions program, a Digital Readiness Assessment tool and a Digital Directors training package;
  • $11.4 million for a new regulatory technology commercialisation initiative to improve compliance and directly support our digital technology firms;
  • $9.6 million to support fintechs to export financial services and attract inward investment;
  • $6.9 million for two blockchain pilots directed at reducing business compliance costs;
  • $5.9 million to boost Australia's influence on international standards;
  • $3.6 million towards mandating the adoption of electronic invoicing by 1 July 2022 for all Commonwealth government agencies to encourage greater adoption amongst businesses supplying to government and within their supply chains, and to consult on options for mandatory adoption of e-invoicing by businesses;
  • $2.5 million to connect workers and small and medium-sized businesses to digital skills training;

All amounts in Australian dollars



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