Consumer data right goes to Parliament
Moves to establish a consumer data right framework for New Zealand have been met with caution by those in the finance sector but it could make life a lot easier for customers.
Friday, 23 July 2021
by Matthew Martin
Commerce and Consumer Affairs Minister David Clark announced the Government would begin the legislative process for consumer data rights (CDR) later this year with the hope it would be introduced sometime in 2022.
“Consumers should be in the driver’s seat when it comes to how their personal information is used by third parties,” Clark says.
A consumer data right (CDR) is a mechanism that requires data holders such as banks, insurers, financial advice companies and electricity retailers, to safely and securely share data with third parties following consent from the customer.
Clark says it would allow New Zealanders to gain access to a wider range of products and services that better meet their needs.
“Any data shared through the consumer data right will only take place with a person’s informed consent and would be strictly used for the reasons agreed upon," he says.
"For example, if a person was seeking financial advice, they could ask their bank to share data, such as transaction information, with their chosen adviser."
“It’s also my intention that the consumer data right will work hand-in-hand with the Digital Identity Trust Framework announced earlier this year."
Following recent consultation on options for a consumer data right, the Government is now in the process of building a regulatory regime similar to the Australian model introduced in 2019.
“The consumer data right will be rolled out on a sector-by-sector basis to ensure that the detailed requirements work in practice," says Clark.
Initial consultation was carried out last year with the Government receiving 59 submissions on the discussion document.
In her submission, Partners Life chief conduct officer Rebecca Sellers said it is important to ensure any legislation is consistent with existing consumer data requirements, such as under the Privacy Act.
"Consideration should also be given to industry-specific requirements to hold data, such as insurance specific disclosure requirements.
"A potential benefit would be cross-sector portability of consumer data, allowing for ‘aggregated views’ of personal information for more complex uses cases than simple ‘search and switch’ transactions," she says.
"For example, if a CDR framework is applied across the whole financial services industry it could empower financial advice businesses to utilise accurate data from multiple sources to build a single ‘source of truth’ from which to base financial advice process and logic."
Financial Services Council of New Zealand (FSC) chief executive Richard Klipin said in his submission that further foundational work is needed to help clarify specific issues with a CDR.
"At the outset, we consider it critical to define the fundamental objectives of a CDR, including, but not limited to, a clear definition of client data and establishing who are the primary holders of data where that information is required across several sectors, for example, health information used by insurers.
Klipin says the FSC is asking for further analysis, evidence gathering and continued consultation with all sectors.
"This is especially important given that overseas, similar CDR initiatives have required significant industry cost and resource to implement, with the benefits still yet to be evidenced on a large scale."
More information is available on the Ministry of Businesses, Innovation and Employment’s website.
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