What is Open Banking and Consumer Data Right?
Since Dwindl uses Open Banking technology, we thought it would good to break down the difference of Open Banking versus Consumer Data Rights:
🔓 Open Banking
Open Banking is a system that allows customers to share their banking data (like transaction history and account balances) with third-party providers safely and securely, through APIs (Application Programming Interfaces).
🧩 Key Points:
Customer-Controlled: You have to consent before your data is shared.
Third-Party Access: Trusted and accredited third parties (like budgeting apps, lenders, etc.) can access this data to offer personalized services.
Better Competition: Encourages competition and innovation among financial institutions and fintech companies.
Examples of Use: Budgeting tools, better credit assessments, personalized financial products.
🇦🇺 Consumer Data Right (CDR) – Australia’s Framework
Consumer Data Right (CDR) is a broader Australian government initiative that open banking falls under. It gives consumers greater access and control over their data across different sectors—not just banking.
🧩 Key Points:
Sectors Covered: Started with banking (Open Banking), then extended to energy, telecommunications, and more planned.
You Own Your Data: CDR is based on the principle that your data is yours—you can choose to share it, revoke access, or keep it private.
Accreditation System: Only accredited data recipients can access data under CDR rules.
Data Portability: Makes it easier to switch providers or get better deals.
🔍 Open Banking vs. Consumer Data Right
Feature Open Banking Consumer Data Right Scope Banking only Multiple sectors Region Global concept Australian implementation Focus Financial data All consumer data Based on Voluntary in some countries Legal right in Australia
Resources:
Open Banking: https://www.ausbanking.org.au/priorities/open-banking/
Consumer Data Right: https://www.cdr.gov.au/
ACCC Consumer Data Rights: https://www.accc.gov.au/by-industry/banking-and-finance/the-consumer-data-right
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