Consumer NZ and BNZ tell MPs a public education campaign is required to promote data sharing

As the Government prepares to introduce a consumer data right (CDR) regime, Consumer NZ says a public education campaign ought to be prioritised to ensure a lack of awareness doesn't create a barrier to peoples' participation.

The CDR is coming via the Customer and Product Data Bill, currently before Parliament's Economic Development, Science and Innovation Select Committee.

The CDR aims to give people greater access to their own data and allow it to be shared between businesses. It's a key plank in the Government's plans to facilitate open banking, with "open electricity" the next cab off the rank, and other sectors such as insurance and telecommunications also in the Government's sights.

In submission on the Bill both Consumer NZ and BNZ, the major bank that has most embraced open banking to date, both advocate for a public education campaign.

"As part of implementing a CDR framework, it is important there is timely consumer education to ensure that a lack of awareness will not create a barrier to consumers’ uptake in the regime," Consumer NZ Advocate Aneleise Gawn says.

"A criticism of the Australian approach to implementation was the lack of focus on large-scale consumer education campaigns, which was regarded as one of the reasons for low public knowledge of Australia’s open banking regime and the CDR system."

"There is a risk that without a well-executed education campaign, through recognised and trusted channels, independent of commercial considerations, consumers will be slow to understand and participate the regime," she adds.

'New Zealand must do better'

In BNZ's submission Paul Hay, the bank's Chief Regulatory and Compliance Officer, says without a clear communication plan from both industry players and government, there's a high risk of a low adoption rate.

"We are not convinced that the public currently have a clear understanding of the opportunities and risks involved," Hay says.

Hay notes a review by the Australian Banking Association and Accenture, which found just 0.31% of Australian bank customers were active CDR customers at the end of 2023. That's apparently off the back of about A$1.5 billion of banking industry investment since 2018.

"New Zealand must do better," Hay says.

"BNZ strongly supports the inclusion of s96(b)(i) of the Bill which includes, as a function of the [Ministry of Business, Innovation & Employment] Chief Executive, the provision of information to customers, data holders, accredited requestors and the public generally that is relevant to the purpose of the Act."

"The CDR framework facilitated under the Bill is an ambitious initiative with far-reaching objectives to promote open and standardised customer data access, enable new products and services, and increase competition across designated industry sectors," adds Hay.

BNZ says it has already partnered with 22 fintech firms, "benefitting over 250,000 customers through secure open data integrations."

Gawn says without a "well-executed" education campaign, through recognised and trusted channels independent of commercial considerations, consumers will be slow to understand and participate in the CDR regime for several reasons.

These include because the technical framework will be off-putting for many people, limited successful use cases to point to demonstrating the convenience and security of open data because of the "frustrating lack of progress" in open banking in NZ to date, and the potential conflict between messages consumers have been exposed to from banks and other agencies when it comes to maintaining the security of their data and the behaviour the CDR regime will require consumers to be comfortable with if it's to succeed.

Measure & test

Gawn also wants to see consumer benefit from the CDR regime measured, and consumer experiences tested.

"Without a way of measuring consumer benefit, the introduction of the CDR in Aotearoa risks becoming a system for businesses to take advantage of, or misuse consumer data for their commercial benefit. The regime in New Zealand must demonstrate benefits beyond simply those accruing to businesses to build consumer trust," she says.

And Gawn suggests MBIE should undertake comprehensive consumer experience (CX) testing "to ensure the framework is robust and fit-for-purpose."

"We encourage MBIE to conduct CX research with a wide-range of consumers experiencing a range of vulnerabilities. Carrying out CX testing will help provide valuable insight into how the CDR regime can cater to a wide range of consumers’ needs and facilitate greater accessibility and inclusion."

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