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Why the Consumer Data Right is more than a compliance cost for non-bank lenders

Picture of Bronwyn Yam

The past couple of years have meant significant growth for non-bank lenders and there are no signs of slowing down, says Bronwyn Yam, the chief product officer at Cuscal.

According to the RBA, the sector grew on average 15 per cent on a six-month annualised basis, more than twice the rate recorded by banks.

It is an exciting – and competitive – time. And it is in this context that the non-bank lender sector prepares to be the next one rolling out the Consumer Data Right (CDR) in Australia. While some organisations try to understand how to best navigate this complex initiative, a key aspect may get lost amid the regulatory language: CDR is way more than compliance costs.

For those organisations willing to make this part of their digital transformation, the initiative presents opportunities to stay competitive, improve efficiency, enhance customer experiences, and drive innovation in the financial services sector.

As a partner of many banking and non-banking organisations, we’ve seen firsthand how data can improve an organisation’s ability to draw strategic insights for its business plans. The good news is that some implementations can be API-driven on a subscription basis, enabling users to securely share their data and empowering companies to build improved financial applications.

Here are key takeaways on how a well-implemented CDR solution can boost businesses.

  • Improved customer experience: As an accredited organisation, non-bank lenders will have access to use consumer data to offer more tailored solutions. Companies that channel this supercharged data pool to drive innovation and product development will deliver improved customer experiences and personalised financial services – a potential make or break in a competitive environment. Easy wins include increasing conversion rates by fast-tracking your lending application process with a mobile-first experience, expedited approval times, quick account verification and pre-funds checks, and streamlined onboarding, easing the deposit of funds and progressing the lending cycle from origination to collections. And this is just the beginning of improved customer experience.
  • Increased visibility of client movement: Non-bank lenders, as mandated data holders, should want access to the metadata generated by their existing customers sharing their data with other organisations. This new dataset becomes a source of powerful insights. At Cuscal, we call them a moat for our clients, protecting their businesses’ revenue and profit. The premise is that if companies use and analyse the data properly, they will notice trends or clients looking to move, allowing them to counteract with a better experience.
  • More accurate risk management: While accessing data is a crucial step in developing a financial application, extracting insights from it truly unlocks its value. Adding comprehensive data overlay services helps companies harness the power of data to make more informed lending decisions, improve risk control, proactively manage hardship, and reduce default rates. Benefits include a deep understanding of spending behaviour with access to enriched transaction details, empowering non-bank lenders to improve their risk assessment capabilities.
  • Increased cyber security: Maintaining robust cyber security practices helps build trust and confidence with your customers and assures them that their data is handled securely and responsibly. CDR also changes the game for consumers and businesses regarding cyber security. It is a safer solution than outdated methods, such as screen scraping, which require customers to share their login details with third parties (e.g. lenders and brokers) for the various compulsory checks for responsible lending obligations. Banning these insecure practices, such as sharing PDFs and scans of transaction statements, minimises the risks exposed by storing them.
  • Compliance with standards and regulations is a key requirement for organisations participating in the CDR framework. That means non-bank lenders will automatically adhere to industry standards and guidelines to ensure data security, limiting exposure to malicious activity.
  • Data protection measures include encryption, access controls, and secure data storage practices to safeguard sensitive information. The CDR framework also imposes ongoing monitoring and auditing of databases, securing consumer data by increasing the chances of discovering risks and losing integrity in datasets.

In summary, CDR is more than a compliance cost to non-bank lenders. It is the next step to increase business competitiveness and protect businesses and consumers in Australia. CDR is about giving consumers peace of mind when they transfer personal data online and giving them control over their vulnerable data.

As CDR continues to roll out, we anticipate a stronger, more protected ecosystem in which organisations, CDR solution partners, and customers are building collectively towards a safer digital economy.

There is much to learn from other industries in preparation for the legislation. However, the reality is that non-bank lenders should consider adopting CDR solutions regardless of the government timelines. CDR will be a reality and the sooner they can be ready and start benefiting from the advantages of data and insights to protect and boost their business, the greater value they will get for their investment.

By Bronwyn Yam, Chief Product Officer

This article was originally published on on 6 May 2024.

Cuscal signals commitment to Australia’s Open Data economy through strategic investment in Basiq

Craig Kennedy and Damir Cuca

Sydney, 10 March 2023

Cuscal Limited (Cuscal), one of Australia’s largest independent providers of payments, banking and regulated data has entered into a binding agreement, under which Cuscal will acquire a material controlling interest in Braavos Corporation Pty Ltd, the parent company of Basiq Pty Ltd (Basiq), a leading Data and Open Banking API platform, subject to customary conditions. A further update will be provided upon completion. This acquisition represents a significant and strategic investment by Cuscal in the future state of the Open Data economy. Bringing together some of the industry’s leading Consumer Data Right (CDR) and payment systems to accelerate the development of new services and customer experiences in partnership with our clients that will enable the convergence of payments, data and digital identity.

Basiq’s deep expertise in financial data aggregation and history of providing tools required to acquire and analyse financial data securely, are complementary to Cuscal’s payments experience and existing CDR solutions.

Basiq will continue to operate as a stand-alone business within the Cuscal Group. It is envisaged that there will be no material change to the current structure of the team at Basiq or to Cuscal’s regulated data business. Basiq will continue to provide clients and the broader industry with access to consented financial data and all the tools required to uncover insights through Basiq’s platform while collaborating closely with Cuscal on enabling new high-value use cases, including those that are made possible by CDR-powered Action Initiations.

Commenting on the acquisition, Craig Kennedy, Cuscal’s Managing Director said: “Today marks an exciting new chapter for Cuscal, as we fast-track our maturity in enabling the Open Data economy and cement our position as a leading provider of Payments and Regulated Data services in Australia.”

“Together with Basiq we have unmatched expertise and capabilities with respect to the combination of payments, data, and the CDR. We look forward to unlocking the full potential of these assets for the mutual benefit of our clients and the wider industry.”

CEO and Founder of Basiq, Damir Ćuća, added: “Using data-only solutions is helpful, but when combined with payments, the possibilities are limitless. Data is essential in making smarter payment decisions and with Cuscal’s expertise in payment processing we can create more innovative solutions that benefit end consumers.”

About Cuscal Limited (Cuscal)
For more than 50 years, Cuscal has championed competition in banking and payments in Australia. More recently, Cuscal has moved beyond banking and payments into the broader data economy. Drawing upon extensive experience managing payments data that is digital, regulated, must always be secure, and flows seamlessly between consumers and enterprise. As an accredited data recipient (ADRBNK2019) and the provider of compliant data holder solutions, Cuscal provides data holders and data recipients access to a suite of secure and robust capabilities for the collection, sharing, management and storage of data subject to CDR legislation.

About Basiq
Basiq’s vision is to make finance easy. Basiq sees a world where consumers are empowered to make smarter financial decisions and can engage with their finances in new and unique ways. Basiq enables this by providing an Open Finance API platform for businesses to build innovative financial solutions. The platform facilitates the relationship between fintechs and consumers by enabling access to consented financial data and executing smart data-driven payments.

Media contact
Simone Perryman:

Unlocking opportunities in the era of open data and payments

Under the government’s Digital Economy Strategy Australia is set to become “a leading digital economy and society by 2030”, with the Consumer Data Right (CDR) one of several initiatives designed to establish the right foundations to grow the digital economy.

Integrated data and technologies will make life easier for consumers and businesses, but enterprises face the challenges integrating legacy systems and infrastructure with real-time digital ecosystems. Cuscal can help enterprises bridge this gap, deploying new capabilities that support the collection, sharing, management and storage of consumer consent and CDR data. While our position at the centre of payments – as the leading provider of New Payment Platform (NPP) payment services to banks and payment service providers – means we are ideally positioned to help enterprises unlock new growth opportunities from the convergence of data and payment initiation services.

This white paper provides senior leaders and product owners with insights into some of the regulatory, technology, security and capabilities required to comply with the CDR today and how to unlock opportunities from the convergence of data and payments.

In this white paper you’ll learn more about:

  • What the CDR is, how it has evolved and what future legislative change may mean for Data Holders in designated industries, as well as for accredited Data Recipients;
  • How NPP capabilities are being enhanced and extended through the development of the PayTo service, supporting ‘write’ access for third party payment initiation from bank accounts in real-time, as envisaged under CDR;
  • What enterprises should consider to enable data-centric strategies that integrate with the CDR and real-time payments, and how Cuscal capabilities and payment expertise can facilitate participation across ecosystems;
  • Use cases demonstrating some of the ways in which the CDR and payment initiation can be applied to make life easier for consumers and businesses;
  • How Cuscal is assisting clients participate in the CDR with access to a suite of secure and robust capabilities for the collection, sharing, management and storage of data subject to CDR legislation; and
  • How Cuscal is enabling payment initiation services that are align with CDR and NPP PayTo frameworks for banks, payment service providers, fintechs and enterprises.

If you’d like to know more about how Cuscal can support your business participate in the CDR ecosystem and with real-time PayTo payment initiation, call 1300 650 501 or submit an enquiry.

Download the White Paper [PDF, 10 MB]

Cuscal announces membership of FDATA Australasia

Cuscal becomes a member of FDATA

Sydney, 18 March 2021 – Cuscal announced today that it will become the latest member of the Australasia chapter of the Financial Data and Technology Association (FDATA). Membership of FDATA will provide Cuscal with valuable advisory, regulatory and industry engagement opportunities through FDATA’s deep knowledge of Open Finance, network of global experts and position on working groups, advisory panels and task forces.

As a Consumer Data Right (CDR) intermediary, Cuscal is committed to supporting data holders, consumers and data recipients to connect safely and securely to unlock the value of data. Cuscal’s Collaborative Data Exchange will manage the technicalities of the CDR for data holders and data recipients, leaving enterprise to focus on one of the most powerful opportunities in Australian commerce. Forward intelligence from FDATA on key policy matters, changes and trends from Australia and across the globe will form part of the Collaborative Data Exchange’s program of continuous development, helping clients to respond to changes in the CDR, including the emergence of new regulation, expansion of the CDR to new designated industries, and updates to data-standards.

Commenting on Cuscal’s membership of the regional chapter, Richard Prior, CEO of FDATA, said:

FDATA is delighted to welcome Cuscal to our worldwide community of members. As Open Finance proliferates across the globe, FDATA shares Cuscal’s goal of enabling the future, supporting the delivery of Open Finance for Australia, and the enormous potential and ambition enshrined in the CDR.

Kieran McKenna, Chief Risk Officer at Cuscal, commented:

We’re delighted to be joining FDATA Australasia at this critical moment during the implementation of Open Banking in Australia. Through our membership we’re looking forward to representing the interest of our clients and engaging with FDATA’s community of members, the government, regulators, policy makers and other stakeholders to help guide the formulation of policies relating to Open Banking and Open Finance in Australia.

The Financial Data and Technology Association (FDATA) is a not-for-profit representing fintechs operating in Open Banking and Open Finance. FDATA work with government, policy makers, and regulators to implement a fair and ethical competitive landscape that promotes competition, innovation, and better consumer outcomes.

About Cuscal
For more than 50 years Cuscal has championed competition in banking and payments in Australia, leveraging our scale, banking knowledge, technical expertise and regulatory experience to deliver reliable and secure solutions that supports the flow of transactional data between customers and enterprises, ensuring fair access to the Australian payments and banking ecosystem.

Media contact
Simone Shields,

Managing consumer consent in a digital economy

Consent management will be a critical function for the successful rollout and uptake of the Consumer Data Right (CDR). In order to meet regulatory obligations, organisations will be required to demonstrate that they have have in place secure and robust consent management capabilities and infrastructure that ensures they can:

  • Safely and securely share consumer data;
  • Efficiently manage customer consent preferences;
  • Maintain customer privacy; and
  • Meet the evolving compliance requirements of the CDR.

This is essential to establishing and maintain consumer trust and for realising the objectives of the CDR.

Watch the video for more on the role of consent management in a digital economy.

Product Data Store – foundational open data capabilities

From October 2020, all Australian authorised deposit-taking institutions (ADIs) will be required to begin sharing Product Reference Data.

Bank rates, fees and the features of banking products covered by Consumer Data Right (CDR) legislation must be available to be automatically accessed in machine readable format in order for ADIs to be compliant with this first major Open Banking milestone. However, operational workflows and technology constraints can present challenges to the streamlined flow of this product data.

Cuscal’s Product Data Store forms part of our flexible and modular approach to Open Banking, providing organisations with an end-to-end, managed solution that takes care of CDR compliance obligations and realisation of the value-added opportunities enabled by the CDR.

Getting your business ready for Open Banking

Open Banking is coming to Australia. When it arrives it will fundamentally change the way financial institutions manage and control their customer data. This will be the first step toward an ‘open data’ future which will also have ramifications for companies in other industry sectors and the broader Australian economy.

While there is certainty that Open Banking is coming, everything else is less clear. The obligations and corresponding opportunities are complex, evolving rapidly and the business cost of making the wrong decision is high.

To help companies with their Open Banking strategy, Cuscal, KPMG and King & Wood Mallesons jointly published a white paper and held a public webcast to discuss the key issues facing companies implementing Open Banking and looking to participate in an open data economy.

What the webcast covers?

  • What organisations should consider as part of their Open Banking strategy
  • What we can learn from open data regimes overseas
  • Examples of Open Banking innovation which have relevance in Australia
  • How to approach the compliance obligations while taking advantage of the opportunities

Open Banking is much more than a compliance exercise

Open Banking and open data

The economic, regulatory and technology landscape in banking and payments is constantly changing. This can lead some people to a kind of change fatigue, where each change is just another one for the pile. While this view is understandable, it can lead you to underestimate the impact of those changes which have much greater and longer-lasting impact. There is one change, coming soon, which will completely reshape banking and payments. I’m talking, of course, about Open Banking – the first application of the Consumer Data Right facilitating an economy-wide consumer-directed data transfer system.

What will this mean in terms of competition?

In the digital age there are heightened expectations about “experience” and how various elements of our life can be seamlessly integrated. An environment of open data, applied in a reciprocal manner, is essential to meeting these heightened expectations. Over time, we think that organisations that are unable to both facilitate and leverage open data will risk becoming irrelevant.

If you think about retail banking today, the ability to compete on product differentiation, price or distribution is very limited. Customer experience remains the greatest opportunity to compete.

This is one of the things that many of Cuscal’s banking clients do incredibly well and are rightfully proud of. However, the digital experience that their customers have has to be constantly improved and refined and the effective application of consumer data will be absolutely key to the future of their success in this area.

When is the right time to enable Open Banking?

It may be tempting to sit back and wait for more progress and certainty in relation to Open Banking and open data. I don’t think this approach is the right one for most financial institutions.

It’s going to be next to impossible to get the timing exactly right for Open Banking.

You will likely either be too early or too late in relation to Open Banking, so you will need to make a deliberate choice about which of these outcomes you want for your organisation.

If you decide to be early, it’s important to move on from compliance-type-thinking towards thinking about the opportunity to compete, enhance the relevance of your organisation and improve your relationship with your customers.

Collaboration will be the key.

The nascent open data economy will be big, complex and uncertain. Exactly how things will develop over time is unclear. I don’t think any single organisation has all of the skills and resources needed to fully maximise this opportunity. Partnering with complementary organisations across the Open Banking value chain, to solve a specific problem or remove friction points, will be crucial to success.

There are a number of related developments that also need to be taken into consideration to create value for customers and enable safe and efficient access to data, such as digital ID, consent management, and the role that NPP may play in Open Banking and open data. We expect developments around open data to progress to payment initiation over time, as they have in other areas.

Just as we have done with the New Payments Platform and The Pays (Apple Pay, Google Pay and Samsung Pay) Cuscal will leverage our strengths across payments data exchange and the development of innovative customer-focused mobile solutions to enable clients to participate in Open Banking, providing support across multiple areas in the lead up to implementation and beyond.

To fulfil the ambition of the ACCC and Treasury of giving customers more control over their information, choice in their banking and convenience in managing their money we will provide clients and others with an opportunity to leverage economies of scale and multi-client solutions to interact with the open data economy.

We are at the beginning of an “always on” and “open data” world. Empowering people to take control, and maximise the utility of, their data will be the foundation of this future.

Read our white paper (published in collaboration with King & Wood Mallesons and KPMG) to find out more of our thinking.

By Craig Kennedy, Managing Director of Cuscal