Consumer Data Right — What’s in it for me? Queries from Jim (a typical consumer)
Manglu Balasubramanian
This article is part of the series of articles on Consumer Data Right.
The first article in this series is available here.
Before we dive deep into Jim’s perspective, let me re-iterate the goal of this series of articles. It is to educate the community (in particular the average customer who is meant to be at the center of CDR) about CDR what it attempts to do, what are the benefits to the participants of this ecosystem/regime.
“The education piece will be critical in building consumer awareness, trust, and comfort in consenting to data sharing”
— Daniel Cannizzaro Founder & CEO, Parpera
This article will be written in the form of a conversation (Q & A style inspired by the Head First Book Series) where Jim (a typical/average Australian consumer) is interacting with Mr. CDR (a fictional character, an expert in CDR and Open Banking). Mr. CDR attempts to answer Jim’s questions in layman's terms. Unless absolutely required, Mr. CDR avoids jargon or technical terms. If Mr. CDR is forced to use a Jargon and/or technical term, He provides definitions, examples, and analogies to help Jim better understand the concepts and principles behind the term(s).
Mr. CDR: Welcome Jim. I heard that you are confused with all the buzz about Consumer Data Right (CDR)
Jim: What? I am confused about a lot of things in life, however, about CDR I am absolutely clear. I honestly haven’t even heard about it. When I know nothing about something, how can I be confused?
Mr. CDR: Ok. Let’s have a general conversation then. Did you hear about the RBAs interest rate cut announcement on Cup Day?
Jim: Yes. It is now at its lowest rate ever — 0.1%. However, my bank has not passed on the rate so it doesn’t make any material difference to me.
Mr. CDR: Oh No!. If you don’t mind me asking, what’s the approximate size of your mortgage?
Jim: Nothing special. It is pretty close to the average Australian mortgage.
Info: The average mortgage facing a person buying an existing home is half a million dollars.
Source: Australian Bureau of Statistics (ABS)
Mr. CDR: How long have you been with your bank?
Jim: I have been with my bank for a long long time (scratching his head, don’t know how long but I know that I have been using them for decades now).
Mr. CDR: Can we switch topics for a second and talk about your recent printer purchase?
Jim: Yes. With COVID-19 restrictions/lockdown, I was struggling to print at Officeworks. My old inkjet printer isn’t working well and I needed a new one. I found a great bargain and even got the retailer to price-beat their advertised price.
Mr. CDR: That’s great. You must be elated about these savings.
Jim: Absolutely. I saved nearly 50$ (approx 10% of the printer price) on this Laser Printer.
Mr. CDR: Excellent. How did you locate the bargain and compare the prices between various retailers?
Jim: I spent time on bargains sites such as ozbargain and Finder. It is easier to compare prices using search engines and comparison sites.
Mr. CDR: Glad that you are taking a lot of effort when you do your purchases such as a printer. Switching gears, your mortgage is approx 500K (which is 1000 times more than the cost of your printer) what efforts are you taking to get a good bargain (i.e lower interest rate, fees, etc)?
Jim: It is easier to compare consumer goods and other everyday purchases. It is a lot harder (in fact impossible to compare banking products such as home loans, savings interests, etc).
Mr. CDR: Have you heard of the term “Lazy tax”?
Jim: No. Did the government sneak in a Lazy tax without making me aware of it?
Mr. CDR: Certainly not. This is not an official tax, This is the hidden financial penalty that is incurred by a lot of customers.
“The lazy tax is the money many Australians are losing simply because they can’t be bothered shopping around,”
— Laura Crowden (iSelect’s Corporate Affairs Manager)
Jim: I certainly don’t want to pay a “lazy tax” on my mortgage or my utility bills. What can I do?
Mr. CDR: One of the key goals of the CDR regime is to get organizations such as banks, telcos, and energy companies to expose data and make them accessible in an easy and secure manner.
Jim: Not sure I am following you. How does that help me?
Mr. CDR: You mentioned that it is difficult to compare banking products. It is difficult because the information is not easily accessible from the banks. The product information is available on their websites and unless the information is exposed in an easy to digest (and compare) format, you will always struggle.
Jim: That explains. How is this problem solved then? You certainly can’t force the big banks to disclose this information in an easy manner
Mr. CDR: Well I can’t force the banks to do this. However, the CDR legislation can and it has already forced the banks to disclose all product-related data.
Jim: Really!!! I am excited now. Can you point me to where I can quickly compare products from a couple of banks (including mine)?
Mr. CDR: Of course. Use the Banking Products Comparator site to compare the products from the various banks. Of course, you can use other sites such as Mozo, Finder, etc as well.
Jim: So is CDR all about building comparison websites for us (consumers) to use?
Mr. CDR: No. I used this as an example of how CDR can benefit customers. Data sharing that is facilitated by CDR allows innovative companies to build a wide variety of solutions that can benefit customers such as yourself. This example is just the tip of the iceberg in the CDR world.
Jim: It has been a good conversation. You got me interested. Let me play with the Banking Product comparator and let’ speak in a few day's time.
Mr. CDR: No worries. Before you go, I will point you to the official CDR website. Have a quick look at the website. In particular, I want you to look at the “Find a Provider” page and see if your bank is listed there. Suggest you also share this conversation with your friends and let’s explore the world of CDR and how it can help us.
What’s next?
Jim will try and do some reading on the official CDR website and come back in a few days (possibly a week or two) with more questions, comments, and thoughts.
We will be back with more questions (possibly the hard and curveball ones) from Jim in the near future. Let’s see how Mr. CDR handles those tough questions!!
Finally?
The recent report from Frollo/Nextgen.net on the state of Open Banking in Australia highlights the key challenge: “Lack of consumer awareness and understanding of CDR”.
Jim with the help of Mr. CDR has taken a step in the right direction to improve his (consumer) awareness of CDR.