With Open banking data we are on a journey. With any new systems there is always going to be an adoption period followed by a bedding in and validation period. Right now we are at the start of that natural progression. As I write this article 32 out of 144 ADIs, who need to be providing Data Holder services to Accredited Data Recipients (ADRs), have managed to get their CDR compliant APIs online and available to the 7 organisations who have managed to attain ADR active status. 9 additional ADRs are still working on converting their Accredited status to Active. These are clearly small numbers.
Awaiting CDR Data
The diagram below shows the current state in the Basiq platform. Currently, the vast majority of data in our platform is from Digital Data Capture (DDC), commonly referred to as Screen Scraping.
The question here is “when is CDR data ready?” The answer is when a large enough percentage of the Australian population is covered by the ADIs who are providing data AND when the CDR data quality is good enough to switch from Digital Data Capture. The APIs and schema definitions provided by the Data Standards Body have a good structure and are filled with interesting and useful data attributes.
On closer inspection, however, you will find many of these attributes are “optional” meaning there is no mandated requirement for the institution to provide them. The current result is the data coming through via the CDR rails is pretty lean and the data available by Digital Data Capture is significantly richer and of more value. You can consume that rich financial data source right now via our Single Unified API to accelerate your transition to CDR data.
Awaiting access to CDR data
The next evolution is the state where CDR data is good enough to turn off an institution’s DDC and consume CDR data as a preference. The Basiq platform will do three things to help our customers transition to Open Banking data:
- Dynamic switching - We will validate the CDR data and compare it to the DDC we currently have for each institution. We will provide guidance for when you should switch. You can of course override our guidance if you wish.
- Single API - We will be providing the CDR data through the Single Unified API that our customers currently use to receive DDC.
- Enrichment and Affordability - We will provide the same processing and enhancement regardless of the source of that data i.e. normalisation of data, enrichment such as transaction categorisation and/or merchant identification and deep aggregated insights for a consumer across multiple institutions.
The question here is “When am I able to consume CDR data”. The answer is quite complicated. Currently there is only one option to enable you to consume CDR data and that is for you to become an ADR. However Treasury and the ACCC have made it very clear they will be providing a path for an ADR to share data with non ADRs, this will be a common option for our customers as the ADR path is costly and will have ongoing obligations to retain that accreditation. The non-ADR path is not formally defined; an exposure draft for Version 3 of the CDR rules was released and closed for response in August. The 5 options proposed ranged from a very formal Sponsorship/Affiliate model, which is practically the same as full ADR accreditation. To a very informal Principal/Representative model with very little control or liability on the part of the Representative.
The highlight here is that this area is very much in flux and we suggest organisations to hold off on making any big commitments regarding accreditation until this position is clarified, as detailed in our Open Banking Transition checklist and guide. This should happen in the next few months. For our full position on this topic, check out this blog post.
CDR Data Rules, OK?
We are confident that we will get to a stage where the vast majority of Australian financial data passing through our platform will be Open Banking data. Even then, there will still be a place for DDC. CDR is rolling out across the Australian economy, we know after Open Banking we will be moving to the Energy sector then on to Telco and beyond. We also know that certain data retrieval will only be available via DDC for several years to come. If you are not using a provider of DDC aggregated data or implementing a DDC solution yourself, you will be missing out.
So, what have we learned? Hopefully a few things:
- In Basiq’s opinion, CDR data is not mature enough to replace DDC just yet, there is a tipping point coming soon
- When that tipping point arrives our customers will be able to receive aggregated, enriched data with deep insights without a whole load of additional effort
- CDR is not the be-all and end-all when it comes to data, you will need to have access to other data sources if you wish to keep up with your competitors and provide the best customer experience to your users.