Push for CDR as government seeks to regulate screen scraping
The MFAA has called on the industry to speed up its transition to the consumer data right (CDR), also known as open banking, following the federal Assistant Treasurer Stephen Jones’ call to regulate screen scraping.
“We’ve been in regular discussion with Treasury this year, highlighting how extensively the mortgage broking industry relies on products that leverage screen-scraping technology, such as Bankstatements.com and Cashdeck, to meet responsible lending and other regulatory requirements,” said MFAA CEO Anja Pannek (pictured above).
“What’s clear is that the federal government would like reliance on this technology to end and regulation of these tools is coming.
“With that in mind, all of industry needs to accelerate use of CDR for trusted advisers, including mortgage brokers, to obtain access to their clients’ financial data.”
In August, the federal government announced the proposed regulation of screen scraping in , signalling a clear message, according to Pannek that mortgage broking is a perfect-use case for CDR.
“Whilst uptake of CDR has been slow, our observations are that product development and integration has definitely accelerated more recently. It’s now up to industry to get on with it,” Pannek said.
MFAA’s submission to the government on screen scraping
The MFAA has participated in 11 submissions on CDR, across both open banking and open finance, over the last five years.
In its recent submission to Treasury’s discussion paper on the policy and regulatory implications of screen scraping, the MFAA welcomed the decision to regulate, rather than ban, the practice.
The MFAA also supported a transition between the two technologies in its submission.
“It’s important for our members, and their clients, that the collection of information is as thorough and frictionless as it can be,” Pannek said. “Our members have told us services that leverage screen scraping technology have been very helpful at facilitating this.”
Orderly transition to CDR needed, says MFAA
Pannek said it was the MFAA’s view that the CDR framework still required some maturity before it can be an effective replacement for screen scraping, “hence our strong recommendation for an orderly transition in our submission”.
“Our call now to industry is to focus on accelerating [CDR] uptake.”
Pannek said the MFAA was working closely with Treasury and the federal government to highlight what was required for an orderly transition, including the expansion of CDR into non-bank lending products through open finance.
Due to the MFAA’s advocacy, she said mortgage brokers were recognised as “trusted advisers” under the CDR framework.
Meanwhile, finance brokers assisted their clients to obtain access to a range of finance options including business loans and vehicle finance.
The benefits of CDR (open banking)
Pannek said to extend the benefits of the CDR to their clients, the MFAA was actively pursuing “trusted adviser” recognition for finance brokers.
Another important aspect of a successful transition to open banking was to educate consumers on its purpose as a safe and reliable method of sharing data and having their mortgage broker assist them.
“With heightened concerns around providing access to personal information following many significant data breaches experienced in Australia, we see brokers playing a critical role in explaining the security and ease of CDR, and building their clients confidence in the CDR regime,” Pannek said.
“We will be launching educational material to support our members in this area next year.”
However, the push to have screen scraping banned has been supported by some in the mortgage sector, including technology solutions provider NextGen, following the release of the federal government’s discussion paper earlier this year.
In September, Frollo revealed it was in the process of phasing out screen scraping in its money management app.
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