Empowering Choice: How Consumer Data Right Puts You in Control

Thangamani Meroli
Thangamani Maroli
17 Mar 2024

Have you ever felt stuck with a bank or service provider because switching seemed like a hassle? What if you could easily share your data securely to get better deals and personalised services? Imagine having the freedom to securely share your data to unlock better deals and personalised services. This is the promise of Consumer Data Right (CDR), a legal framework coming to New Zealand that puts you in control of your data. 

Understanding CDR 

Think of CDR as your personal data passport. It gives you the right to access and share your data, like transaction history and account details, with trusted third-party providers. Imagine wanting a better mortgage deal. With CDR, you could securely share your banking data with a financial advisor who can analyse your financial health and recommend the optimal option. This empowers you to shop around for the best services and ultimately get a better deal. 

Benefits beyond Choice 

CDR goes beyond just giving you choices. Here’s what you can expect: 

  • Unlocking the Value of Your Data: Currently, your data sits in silos with different providers. CDR lets you share it securely with trusted third parties who can analyse it to offer better deals on financial products, energy plans, or phone contracts. 
  • Taking Action on Your Data: Ever found an error in your credit report? CDR allows you to initiate actions on your data, like correcting mistakes or even requesting its deletion. 
  • A More Competitive Market: With easier data switching, CDR fosters competition between service providers. This means more innovation and potentially better financial services and pricing for you. 
  • Innovation at Your Fingertips: CDR opens doors for collaboration between banks and third-party developers. This paves the way for new applications and services that leverage your data to offer a more personalised experience. 

Challenges of the Past, Solutions for the Future 

Before CDR, traditional interbanking faced several limitations: 

  • Limited Control: You had little control over your data held by banks. 
  • Data Silos: Legacy systems lacked standardised interfaces, making data sharing between banks difficult. 
  • Restricted Competition: Competition relied heavily on factors like interest rates, limiting your choices. 
  • Switching Woes: Transferring data between banks was a complex and time-consuming process. 

CDR tackles these challenges head-on by: 

  • Empowering You with Control: You decide who gets access to your data and for what purpose. 
  • Standardisation for Smooth Sharing: CDR mandates the use of standardised APIs that ensure secure and consistent data exchange. 
  • Levelling the Playing Field: Third-party providers can access customer data, fostering a more competitive market with a wider range of options. 
  • Portability Made Easy: CDR simplifies data transfer between banks and service providers, making switching a breeze. 

Real-world examples:

  • Mortgage comparison: When a consumer wants to switch to a new mortgage provider, with CDR, they can securely share their financial data with multiple vendors to compare offers and choose the best deal. 
  • Energy Plan Optimisation: Share your usage data through CDR, to receive personalised recommendations from different providers tailored to your consumption patterns. 
  • Telecom Contract Comparison: Share usage data with various telecom companies to find a plan that suits your needs and budget. 

Potential risks and Safeguards: 

While CDR offers significant benefits, it’s essential to be aware of potential risks, including: 

  • Data Security: Sharing personal data could expose individuals to the risk of data breaches or unauthorised access. However, robust encryption protocols and strict authorisation controls are in place to safeguard sensitive information. 
  • Privacy Concerns: Increased data sharing may raise privacy concerns among consumers. CDR addresses this by requiring explicit consent for data sharing and empowering individuals to control their data usage. The Privacy Commission plays a crucial role in overseeing compliance with data protection laws and ensuring that consumers privacy rights are upheld. 
  • Misuse of Data: There is a risk that third-party providers may misuse shared data for unauthorised purposes. To mitigate this risk, CDR mandates stringent regulations and penalties for data misuse, ensuring accountability and transparency. The Commerce Commission also plays a pivotal role in regulating competition and enforcing compliance with consumer protection laws, thus safeguarding consumers against potential abuses of their data. 
  • Sector-Specific Regulations: In sectors such as energy and health, additional regulatory bodies such as Energy Authority and Ministry of Health, respectively, may oversee the implementation. These bodies ensure that data sharing complies with sector-specific regulations and standards, safeguarding consumers interests and promoting fair competition within these industries. 

Learning from Australia’s Experience 

Australia has already implemented CDR in banking, energy, and telecom sectors. This allows consumers to share data to explore better deals on mortgages, compare energy plans, and find the best phone contracts. New Zealand is poised to follow suit, looking to CDR to empower consumers and boost the financial services sector. 

The Road Ahead for CDR in New Zealand (Latest Update) 

The Ministry of Business, Innovation & Employment (MBIE) is leading the implementation of CDR in New Zealand. Public consultation on the draft law, called the Customer and Product Data Bill, closed on July 24th, 2023. The MBIE is currently considering public feedback to refine the legislation. 

Here’s what to expect next: 

  • Late 2023: The MBIE is expected to complete policy approvals and finalise the draft legislation. 
  • Late 2023/Early 2024: The Customer and Product Data Bill is expected to be introduced into Parliament for debate and approval. This may involve further public submissions. 
  • Once the Bill is passed: The official implementation timeline for CDR will be announced. Banking is confirmed as the first sector to be designated under CDR, with energy and health sectors likely to follow. 

Empowering Yourself in the Data Age 

CDR is more than just a technical framework; it’s about giving you control over your digital footprint. By understanding CDR and staying informed about the latest developments, you equip yourself to make informed decisions and derive maximum value from your data. 

Empowering Choice: How Consumer Data Right Puts You in Control
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Thangamani Meroli

Thangamani Maroli is a passionate data architect with a proven track record in bringing data insights to life. For years, she has helped businesses across India and New Zealand unlock the value of their data, from design and architecture to implementation. Her expertise spans across data governance, SDLC (Software Development Lifecycle), data pipeline development, and data analysis and reporting.

Thangamani has a knack for making complex data accessible. She has extensive experience working with various CRM, Customer Management, and Marketing Management Systems, helping businesses launch data projects that integrate seamlessly with existing tools. She’s also a whiz at transforming data to ensure smooth ingestion and processing, allowing businesses to gain valuable insights from all their information.

Thangamani’s commitment to continuous learning is inspiring. She’s a regular speaker at Data Talks meetups as well as the University of Auckland Data Science Club via dataengine – always eager to share her knowledge and challenge herself with new problems.

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