12 July 2021: Auckland, New Zealand: Data and analytics firm illion supports the New Zealand Government’s decision to implement a new legislative framework to establish a consumer data right (CDR).
This is a new policy initiative which aims to allow consumers to access and share their data, giving them greater choice and control over how it is used, promoting innovation and facilitating competition.
“Think of it as a human right around data; your data is yours to do with as you like and it doesn’t belong to an institution such as a bank,” said Simon Bligh, CEO of illion.
“illion has a strong presence on both sides of the Tasman, and we recommended the creation of a CDR and segment by segment implementation in a submission to the Ministry of Business, Innovation and Employment Discussion Document – Options for establishing a consumer data right in New Zealand in October 2020.
“In Australia, the CDR went fully live on 1 July 2021 in its first guise as open banking. Australian consumers can now share their banking data with third party institutions such as banks, credit unions, fintechs, online lenders and money management apps.
“We are at the centre of this new digital economy. It’s very exciting as it is probably the biggest revolution in credit for 30 years.
“Open banking is a global megatrend in more than 30 countries around the world: “It’s set to influence several other value chains; telecommunications and energy are the obvious ones, but insurance will also go through significant change,” said Mr. Bligh.
Lessons from the UK
Open banking requires full utilisation and cooperation from all players, and this was pioneered in the UK a few years back. As a result of the UK’s 2018 Second Payment Services Directive (PSD2), hundreds of banks and fintechs have joined this new ecosystem, with more than 2.5 million consumers and businesses now using open banking products.
With a strong and centralised regulatory framework and strict enforcement of technical and customer experience standards, the UK’s open banking system has been operational for three years now but it’s still very much a work in progress.
To encourage participation, data sharing and innovation, consumer education and trust will be the key to the successful implementation of the CDR in New Zealand.
New Zealand implementation
The CDR will be rolled out on a sector-by-sector basis in New Zealand, with the Government designating individual markets, industries and sectors to which it will apply. Primary legislation will establish the process and requirements relating to the designation of sectors, and provide for the types of data and functionality to be set during the designation.
Primary legislation will also contain obligations that will apply to businesses within designated sectors, including requirements relating to accreditation, and information and consumer protection safeguards. More of the detailed requirements will be set out in secondary legislation following the designation of a sector.
It is intended that a Bill will be introduced in 2022.