Launched in July 2020 for major bank clients in Australia, the CDR regime is an opt-in open banking service that allows users to share their data. If they consent, secure automatic data technology is used to send the information.

According to ABA CEO Anna Bligh, the assessment, which was commissioned by the organization and carried out by the Dublin-based business consulting firm Accenture, finds that the CDR regime "has not fulfilled its potential."

According to the research, by the end of 2023, just 0.31% of bank clients were utilizing CDR, and over 50% of data-sharing agreements were either terminated or allowed to expire throughout the year.

The CEO of the Customer Owned Banking Association, Michael Lawrence, claims that despite Australian banks investing heavily in the "success" of CDR—roughly AUD 1.5 billion—the program has made it "more difficult for smaller banks to compete by tying up resources with little to no tangible return."

According to the assessment, the industry's competition is being harmed by CDR since mid-tier and regional banks have far greater compliance costs than big banks. Moreover, it notes that smaller banks are being forced to make "trade-offs," with "critical technology and customer projects being deprioritized," as a result of these increased compliance expenses.

"Digital banking innovations like PayID and mobile wallets have been warmly welcomed by Australians, but the CDR has seen relatively low adoption," Bligh claims.

"We need to start again from scratch. A fresh course of action is required since the present CDR policy isn't benefiting consumers or fostering competition, she says.

Lawrence continues, saying, "We want a clear plan to guarantee the CDR delivers on its initial objective to increase competition before smaller banks invest additional resources.

"Moving forward in the absence of these fundamental changes will worsen competition and take vital funds away from enhancing customer outcomes and assisting local communities."