Following the Government's announcement last July that a Consumer Data Right (CDR) framework will be established for New Zealand, Commerce and Consumer Affairs Minister David Clark confirmed yesterday that banks will be the first sector designated to implement the CDR.
Starting with the financial services sector
The financial services sector has been considered the natural starting point for rolling out New Zealand's CDR regime, particularly given the significant investment some banks have already made towards open banking.
Banks were also the first sector to be designated in Australia, providing New Zealand with a unique opportunity to front-foot some of the issues experienced through the Australian implementation.
The expectation is that implementing a CDR framework in the banking sector will provide a catalyst for launching into other sectors in New Zealand.
When can we expect draft legislation?
The next step will be consultation on an exposure draft of the CDR legislation (which the Government has previously indicated would be released by the end of this year). The structure of the legislative framework and applicable timeframes (eg how consultation on the exposure draft will work) are yet to be determined.
Key takeaways on the CDR from Payments NZ Conference
At the recent Payments NZ Point 2022 Conference, open banking and the CDR were key features on the agenda, including the following insights:
- the industry needs to move "at the speed of trust" and educate customers as to the value of specific CDR-enabled products to ensure strong uptake;
- right-sizing of the CDR for New Zealand, and building on the significant industry-led efforts and momentum to date, will be critical to the CDR's success;
- Commerce Act concerns regarding collaboration restrictions have traditionally created perceived or actual obstacles to progress, which may need to be addressed in CDR legislation;
- there is strong support amongst some sectors of potential CDR participants for action initiation (eg payments) to be included within the scope of the CDR; and
- when looking at the CDR framework, it will be important to consider cultural aspects and how those inform our relationship with data in Aotearoa New Zealand.
The Russell McVeagh team will be monitoring the developments and will provide a further update when the exposure draft of the legislation is released. In the meantime, if you would like any advice regarding how the New Zealand CDR might affect you and organisations in your industry, please do not hesitate to contact us.
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