Approaching the two-year anniversary of the government’s Consumer Data Right changes advisers are not taking advantage of the benefits of the data sharing system according to EY.
EY Oceania consulting partner Andrew Parton tells Professional Planner there is absolutely no reason why financial planners shouldn’t be thinking about becoming an accredited data recipient to take advantage of CDR.
“Are advisers taking advantage of it? Not that I’ve seen in the market at the moment. Should they be? I think so.”
There are two modes of operation within CDR, Parton said; the institutions that are mandated to be compliant and advice practices that are in the position to benefit.
“Having a look at the breadth of data they could access from their customers and the potential that would give them, there’s a whole bunch of benefits – there’s quite a lot of discovery and data required in financial planning.”
“If you wanted to understand details of [a client’s] savings, current accounts and mortgage products… all of that information to be transferred to you almost instantly via CDR simply by completing a consent process,” he continued.
CDR launched in mid-2020 with open banking which required the big four to be compliant while other banks had another year.
The CDR is one of the recent regulatory developments that will be included in the Quality of Advice Review, although given some of the big name headline acts in the terms of reference it may become an afterthought to an industry focused on larger priorities.
Open banking has been on the periphery for financial advisers with only some early adopters have tapped into portals that link them up with clients’ banking accounts, superannuation funds and insurance policies.
EY supported the ACCC as a strategic adviser in the early staged of the rollout of CDR into banking which Parton said was handled much better here than in the UK.
“The regulator there [in the UK] took a much more hands-off approach with the UK banks and on the go live date only two of the nine made it. It wasn’t a great start for the open banking regime in the UK. The ACCC wanted to do more to try and ensure that when it was turned on it was all working and functioning.”
Open Finance will be the fourth sector to be covered which will allow companies to act on behalf of consumers when doing things like making payments and applications.
