What Europe can learn from Australia’s Consumer Data Right
What can Europe learn from Australia’s flawed start? Despite ambitious goals, high costs and low adoption have prompted a rethink of Australia’s Consumer Data Right. As Europe moves forward with FiDA, a more targeted, market-driven approach could help avoid similar pitfalls and unlock real value for both consumers and providers.
Open finance, meaning secure third-party access to financial data with customer permission, has been at the forefront of regulators’ discussions in many countries, from Australia, to India, Singapore, and the US. Its goal is to give consumers more control over their data, foster competition among providers, and enable innovative services such as personalised financial advice, faster switching and improved product comparisons.
In the EU, the European Commission proposed in 2023 the Financial Data Access Regulation (FiDA). FIDA expands regulated data-sharing well beyond payment account data to include mortgages, loans, savings, investments, insurance, pensions, and more.
Under FIDA, a broad range of financial institutions (a. o. banks, insurers, investment firms, pension providers) will be required, upon customer consent, to share this data with authorised third parties.
What could be the potential implications for financial institutions and customers? To understand this, it is important to look at countries where similar laws have been implemented and the impact they had on financial institutions.
Consumer Data Right
In 2019, Australia launched the Consumer Data Right (CDR) legislation. The CDR provides consumers with the possibility to share specific data with other accredited businesses through a secure system. This way, consumers can compare products and services, switch providers more easily, and benefit from individualized offers. The CDR started out in the banking sector with the intention of it being expanded to other sectors, such as telecommunications and energy.
Five years in, the results of the CDR reveal a stark reality. Overall industry spending since 2018 has exceeded AUD 1.5 billion (approx. EUR 900 million), while large Australian banks, like Westpac, individually invested up to AUD 200 million (approx. EUR 120 million) in implementing the system. However, by the end of 2023, only around 0.3% of bank customers were actively using the system.
High cost, low return
Despite this investment, the system has struggled to deliver real value. More than half of all customer consents for data sharing were not renewed, and 27% of consent processes failed due to technical issues. Data quality is often poor, with reference data incomplete or inaccurate, undermining the usefulness of comparison platforms and other applications. Banks, seeing little strategic or financial return, have scaled back to meeting only the minimum legal requirements.
A government review in 2022 concluded that the CDR had not realised its potential, and in 2024 the Finance Minister called for a full “reset.” Expansion of the framework into sectors like insurance, telecommunications and pensions has been paused to avoid creating further costs without benefits. Instead, the government plans a strategic reassessment, focusing on clearer use cases, simpler implementation, and lower costs.
Conclusions for the EU
For the EU, Australia’s experience carries a clear warning. A top-down, regulator-driven model can generate vast costs while leaving consumers and providers disengaged. A market-oriented, step-by-step approach – as proposed by France and Spain within the EU’s FiDA framework – may help avoid similar costly downsides and ensure that open finance delivers tangible benefits to customers.