Open banking and mortgage data – what this means for you (and your mortgage broker)

Consumer data is one of the most valuable commodities of the modern world. And of all the available data, it could be argued none is more highly prized than financial data. That’s why prior to July 1, 2019, banks and other financial institutions zealously guarded their customer’s data, giving them an unfair advantage over those same people. Enter a review into Open Banking, the introduction of the Consumer Data Right (CDR) and its subsequent staged rollout, and here we are. As of November 1, 2020, customers of the big four Australian banks (Westpac, CBA, ANZ and NAB) can share their mortgage data with accredited third parties, known as an accredited data recipient.   What is the Consumer Data Right (CDR)? The CDR means all individuals will be able to:

• choose with who you share your data
• confirm the parties you share with are authorised, and
• guarantee you data is used only for its intended purposes.

It’s given consumers greater control not only of their personal information but how they themselves use it. Up until October 31, the Consumer Data Right only related to data for:

• savings and transaction accounts
• personal accounts
  • term deposit accounts
  • call accounts
  • current accounts
  • cheque accounts
  • debit, credit or charge card accounts, and;
  • GST or tax accounts.

However, the most recent release on November 1 allows customers of the big four banks to share the following data with accredited data recipients of their choice.

• mortgages
• joint accounts
• mortgage offset accounts
• personal loan accounts, and;
• certain closed accounts

Data Privacy All consumer data continues to be protected by the Privacy Act (1998). Breaches of the Privacy Act are referred to the Office of the Australian Information Commissioner (OAIC) who not only has the power to investigate a complaint lodged by a consumer, but also the power to commence an investigation following a data breach. Nothing has changed in the way data is currently protected. What kind of data can be accessed? Since July 2020, and with your consent, an accredited data recipient has been able to access your data related to yourself, your small (sole-trader) business, your transaction details and account balance. Now you can also share: ∙ customer data, including your:

• contact details
• occupation

∙ specific account data, including your:

• account number
• interest rates you earn or that apply on a product like a home loan
• fees you pay
• any discounts you receive.

∙ authorisations relating to your accounts, including:

• direct debits
• scheduled payments
• saved payee details.

Not getting the best customer service from your current lender? Not 100% sure you’re actually getting the best deal? Borrowers can now (hypothetically) scoop up all their information and take it wherever they want to find a better deal. Providing consent to share new and existing data under CDR can be found on the Australian Competition and Consumer Commission (ACCC) website. What do the new CDR changes mean for borrowers? The new changes could signal a flurry of activity with borrowers looking to refinance, especially with everything 2020 and the COVID pandemic has thrown at them. Many borrowers would be looking to scrape back any dollars available to them. Some may even approach their lenders directly, effectively cutting out the brokers. But before you start updating your LinkedIn profile to look for a new job, it may not be all bad news. People need help Many consumers have been put through the proverbial ringer in 2020. The year opened with catastrophic bushfires, quickly slid into COVID which caused restrictions, lockdowns, job stand downs, unemployment, reduced hours, rental evictions and loan repayment moratoriums. It’s fair to say most of us are staggering to December 31, just hoping for the best for 2021. So people are still going to be looking for value and options that brokers can provide. CDR access for brokers The ACCC has recently launched a consultation proposing changes to the CDR that would enable ‘trusted advisors’, including mortgage brokers, the ability to access CDR data in certain instances. The articles says: Following consultation with industry, the ACCC noted that it was “critical” that a broad range of recipients were able to engage in the Consumer Data Right scheme for it to “ achieve the competition and innovation objectives of the regime, and for the CDR to support Australia’s digital economy”. And let’s face it, a mortgage broker can give a borrower what the banks can’t. Options and guidance.