Home / Regulation / Jones announces immediate change to ‘complex and confusing’ CDR framework

Despite its potential and the massive investment behind it, the Consumer Data Right has had little impact due to a host of factors. Frustrated with its low take-up, the government is making changes to put the framework on "more sustainable footing".

Financial services minister Stephen Jones has announced an immediate upgrade to the Consumer Data Right (CDR), which is designed to make the framework easier to use and help increase take-up from the public.

The new changes will, according to the federal government, improve the CDR’s functionality and ease-of-use in three ways:

1. Simplify the consent process and streamline requirements for providers. By allowing consents to be bundled, consumers would be able to provide multiple consents through one single action. This will improve the consumer experience and increase uptake.
2. Remove barriers for banks by simplifying requirements that apply when an accredited bank seeks data from a consumer. The previous process was complex and confusing for consumers, often resulting in them dropping out.
3. Support innovation by extending a trial of CDR‑enabled energy products to 24 months (up from 12 months) and to 2,000 customers (up from 1,000). The expansion will ensure the trial period supports the unique nature of energy contracts.

The CDR has been a disappointment for the federal government since being rolled out in 2020.

Touted as a breakthrough for its ability to allow consumers to share their information between businesses that hold information about them, it was predicted to revolutionise the banking and energy sectors. Four years later, however, a report by the Australian Banking Association (ABA) revealed that only 0.3 per cent of bank customers were actually using the CDR.

“Australian banks have invested heavily to secure the success of the consumer data right. Despite the best efforts of government, regulators and industry, this review makes it clear that CDR has not realised its potential,” ABA chief executive Anna Bligh said.

Theoretically, the CDR should make it much easier for consumers to switch between providers for products like bank accounts and home loans, financial advice and household services like electricity and internet.

In practice, the process to sign up for the CDR was too complex and involved a poor user experience. The compliance settings around it were set too high, and its use case was poorly communicated to consumers who eschewed the CDR in favour of manual, legacy transfer processes.

The government has acknowledged these issues, with Jones noting that while the CDR has the “potential to be a transformational piece of economic reform”, it needed to remove friction and “improve cost effectiveness” by changing the rules.

“The Albanese Government is getting the CDR framework on a more sustainable footing,” Jones (pictured) said. “The Government is working with stakeholders to ensure we introduce changes that represent value‑for‑money.”