ABA Advocates for Inclusion of Government Data in Consumer Data Right
The Australian Banking Association (ABA) has voiced its support for the inclusion of government data in the Consumer Data Right (CDR), as it believes this would provide a reliable source of income verification for lenders. This was announced by Christopher Taylor, ABA’s Chief of Policy, during a panel discussion at the Fintech Data Horizons Summit held in Sydney.
Chris Taylor, ABA
Addressing Income Misrepresentation
Income misrepresentation is a growing risk to lending, with issues ranging from consumers inflating their borrowing power to AI-enabled fraud by organised crime. The panel suggested that to combat this issue, lending should move away from less secure methods such as screen scraping, email attachments and physical documents. Instead, consumers should be allowed to share Australian Taxation Office (ATO) data through the CDR.
Open Banking: A Sound Intent with Room for Improvement
While Taylor praised the “sound intent” of open banking, he doubted whether the original criteria established for the federally regulated data sharing regime had been achieved, implying there is still room for improvement. He also questioned the costs, usage, and utility of open banking in Australia, which has now been operational for almost six years. Accenture data from 2024 had disputed whether bank customers were using open banking, although Taylor acknowledged there has been growth in the last two years.
ABA Supports Inclusion of ATO Data in CDR
Confirming the ABA’s stance, Taylor stated that the association is in favour of including ATO information in the CDR. This would allow banks to meet responsible lending obligations and combat fraud more effectively. He highlighted the industry-wide agreement on accessing ATO data, pointing out that it would unlock benefits for the entire system, reduce fraud, and improve productivity.
Legal and Privacy Considerations
However, the inclusion of ATO data in the CDR would be a significant reform, given that the privacy of tax information is protected by the Taxation Administration Act. As Clare Gunning, a former ATO Deputy Commissioner, pointed out, the ATO is currently unable to share your data with anyone, even with your consent.
The Potential Benefits of Open Banking
Despite the legal hurdles, the potential benefits of open banking and digital identity are numerous. According to Tony Carn, NextGen’s Chief Customer Officer, these include reduced cost and increased speed. Taylor added that quicker processing would result in more loan approvals, while the historical assumption that physical documents are hard to fake is rapidly diminishing due to advances in artificial intelligence.
Conclusion
In conclusion, the ABA believes that the inclusion of government data, specifically ATO information, would provide a significant boost to the CDR. The Fintech Data Horizons Summit, hosted by FinTech Australia, brought together 300 participants to explore “fintech for good” in open banking, open energy, digital identity, sustainability, and financial inclusion.
Source: Here
