Does CDR have a branding problem?

When the Consumer Data Right (CDR) was first conceived, it was all about "open data" across various sectors. Banking was the first to open the door, followed by Energy, with Superannuation likely next.

But zooming out for a moment, while the tech world was buzzing about "data portability," most Mortgage Brokers were busy enough just trying to navigate rate rises and keep their heads above water. We've seen a renewed focus lately on trying to enhance the user experience of CDR in the banking sector before it expands further—and I think a large part of that "experience" comes down to how we talk about it.

 

What is CDR?

The number of times I’ll be talking to brokers or lenders and that acronym—doesn’t banking love a good acronym?!—leaves people scratching their heads is phenomenal. This is surprising considering the scale of investment that has gone into the Consumer Data Right.

If I instead asked, “Have you heard of Open Banking?”, I get far more hands in the air.

The general response is usually: “It’s data sharing between the bank and the customer.” That’s a good starting point, but for our industry, it’s missing the most practical application: It is the difference between having a static list of names in a CRM and having real-time visibility into your clients' actual financial positions.

The Nuts and Bolts

CDR (or my preferred term, “Open Banking”) is a government-regulated system that allows for the secure sharing of data between banks (Data Holders) and accredited organisations (Data Recipients) or nominated “Trusted Advisors.”

As a Mortgage Broker, you fall into that Trusted Advisor category.

A practical, day-to-day example of Open Banking in action is the Annual Loan Review. Currently, once a loan settles, most lenders do not allow a broker ongoing access to the client's data. To conduct a review, you have to contact the client and ask them to provide the information manually.

With Open Banking Data, you get a clear, accurate view of their current balance, interest rate, and repayment history instantly. This allows you to provide informed guidance in minutes rather than days spent chasing documents.

Today, there is a growing ecosystem of Open Banking tools designed specifically for our industry, such as LoanCheckr, Frollo, and Sherlok, among others.

Why is this system important?

Open Banking is important because it solves two of the biggest headaches in a broker’s workflow: friction and security.

1. A Frictionless Client Experience: Leveraging Open Banking data makes the data collection process simple. Think about the alternatives. The classic is the PDF download. This is nightmare fuel for any broker when a client with thirteen different bank accounts has to manually login, download, and email dozens of statements. Open Banking replaces that manual chase with a digital "yes," providing you with the data you need in seconds.

2. Security over Screen Scraping: The other common alternative is "data scraping." In a nutshell, this involves the customer giving a third-party software their actual internet banking username and password so the software can "scrape" the data.

As a Trusted Advisor, asking a client to hand over their bank passwords is a significant security and compliance risk. Open Banking removes this risk entirely:

• No Passwords Shared: The client never gives you or any software their password.

• OTP Security: The system uses a One-Time Password (OTP) via the customer’s own banking app or a text message to their registered phone.

• Explicit Consent: Access is only granted for exactly what is needed, and the client remains in control of that connection at all times.

It is, quite simply, a far safer and more professional way to handle sensitive financial information.

So, this branding issue…

The Consumer Data Right (CDR) is designed to be vast. In the future, it will likely cover everything from your energy bills to your supermarket loyalty data. Imagine a world where entrepreneurs can build apps that help you find the cheapest grocery basket in real-time. That is the broader vision for CDR.

However, back in the present, this broad branding has created a gap in understanding.

I believe that as an industry, we need to lean into the term “Open Banking” within the CDR framework. Using the more specific language helps clients and colleagues immediately understand the value proposition: secure, bank-grade data sharing for financial outcomes.

One of the core issues is that the people most likely to actually use this system are finance professionals. There is a reason the legislation created a category of Data Recipients called “Trusted Advisors.” The Trusted Advisors—the brokers, accountants, and planners—are at the coalface. You are the ones most likely to request this data because it underpins your day-to-day work. You are the bridge between the government’s big-picture data policy and the consumer’s practical need for a better loan.

An Open Banking Call to Action

Mortgage Brokers acting as Trusted Advisors need to become better educated around what Open Banking is, how it works, and how it applies to their customers. The better informed we are, the more trust goes into the system, and the better equipped we are to handle the questions clients will inevitably ask as this technology becomes the norm.

There are two ways we need to tackle this education gap.

The first is the banking industry itself. When was the last time you heard about Open Banking from a lender or had a training session on how it works from their side? Despite the heavy investment, if you ask a lender's call centre operator about CDR, there is a good chance they won't know what you’re talking about.

The second is our own industry. While industry bodies acknowledge the existence of Open Banking apps, there is a noticeable silence from many aggregators regarding the practical impact this technology has on a broker’s daily productivity and compliance.

Let’s Talk About It

It’s not often that Mortgage Brokers have something truly new to talk about. We’ve all been through the same AML/CTF refreshers, cyber security sessions, and lender policy updates. But Open Banking is a fundamental shift in how we handle data.

Eventually, your clients will expect you to use it, and your aggregators will likely recommend it for the security and productivity gains it offers.

My advice? Start the conversation now. Ask your industry association and your aggregator for more information on Open Banking and CDR. The more informed you are, the better you can guide your customers when they turn to you for advice.

When it comes to Open Banking, you can either be at the table or on the menu. Give your business the edge and understand this technology before your competitors do.