How the evolution of the CDR unlocks new opportunities for non-bank Lenders
The evolution of the Consumer Data Right (CDR) in Australia has not been without its challenges. When the CDR first launched three years ago, it represented a bold vision to empower consumers by putting them in the driver's seat when it comes to their own data, enabling more informed decision-making and better financial outcomes for all Australians.
However, as with any new regulatory framework driven by a prescribed technical specification and consumer experience, its rollout was complex. Both the banking and energy sectors have grappled with technical integration and data quality challenges, whilst simultaneously navigating maturing regulations, unforeseen delays on expected incremental CDR capabilities and new industry designations.
Despite these challenges, the CDR is steadily growing into the transformative force it was intended to be, providing Australian consumers with secure, consent-driven data sharing that supports informed decision-making, more competitive choices and an improved digital consumer experience in banking, lending, and energy.
With non-bank lenders (NBLs) now officially joining the CDR in 2026, we are entering a new and exciting phase for the CDR and Australian consumers. The inclusion of NBLs into the ecosystem presents a plethora of innovation, new competition, and consumer experience opportunities that will significantly shape the future of lending in Australia.
According to data from the RBA, NBL loans now account for 5% of total financial system assets as more Australians turn to non-bank lenders for loans. This shift highlights the growing demand for diverse lending solutions and the increasing importance of allowing Australians to share their data from non-bank lenders. Data sharing will ensure borrowers can more easily compare and apply for loans, saving both time and money.
As NBLs' participation in the CDR ramps up, consumers will be able to easily compare bank products to non-bank lender products. This will not only help meet the evolving needs of borrowers but also bring new products into the marketplace, such as loans for renovations, renewable energy investments, or purchasing business equipment. As consumers increasingly seek more tailored and competitive lending options, the CDR will allow NBLs to continue to more effectively innovate and compete with incumbent lending providers.
Empowering NBLs: Leveraging data and expanding market reach
As NBLs join the CDR, consumers will gain the ability to share their own data, allowing them to create personalised, flexible financial products and experiences tailored to their individual needs. Small businesses that have often struggled to secure financing from traditional banks are also set to benefit from this uplift in capability, competition, and experience. NBLs that become data recipients will be able to, with individual consumer consent, gain deeper insights into customer needs and expectations. NBLs will be able to offer bespoke lending solutions that include cross-industry value propositions and bundled product offers; bundled energy plans being a great example.
The CDR also gives NBLs direct access to a value-focused consumer marketplace, providing greater visibility of their brand and product offerings in an ecosystem intended to aid consumers in actively discovering alternative and more competitive providers. As Australians continue to opt for digital channels as a preferred means of evaluating and purchasing financial services, NBLs are ideally placed to activate this new digital channel and offer compelling alternatives to incumbent offerings.
Revolutionising small business financing
Traditional banks often impose rigid lending criteria and lengthy assessment processes on borrowers, making it difficult for small businesses to access financing in some circumstances. By leveraging the flexibility of the CDR, NBLs that become data recipients can offer a more intelligent and efficient digital loan origination experience to inform more suitable product offerings with adaptable repayment structures and shorter loan terms, making capital more accessible when small businesses need it most.
The inclusion of NBLs as mandated data holders in the CDR is not simply an extension of an existing compliance obligation—it's a transformative opportunity for NBLs to shape the future of lending in Australia.
When consent-driven consumer data sharing is complemented with the application of contemporary digital channel technologies, NBLs are presented with an unprecedented opportunity to offer more tailored, flexible, and compelling products that meet and inform the evolving needs of consumers and small businesses.
As the CDR ecosystem continues to grow and mature, it is highly likely that the Australian government will continue its bipartisan objective to empower Australian consumers to access a more competitive and innovative services marketplace in which consumers control their interaction with providers.
Whilst the shapes of emerging opportunities are still forming, NBLs who recognise and capitalise on these opportunities will position themselves at the forefront of the lending industry, enable more successful navigation of an evolving financial landscape, and outperform their competitors.
Lessons NBLs can learn from early industries in the CDR
As the CDR continues to expand to include more industries, products, and services, there have been some important lessons learned along the way that can significantly advantage new data holders. First and foremost, the CDR is complicated and nuanced. Partnering with experts can help you identify the opportunities involved in becoming a recipient, whilst navigating the complexities of meeting the new NBL data holder obligations.
Those banking and energy providers who approached the CDR not just as a technology-focused compliance exercise, but rather as a new digital channel to engage their customers, have been able to execute opportunities to create customer and business value, whilst managing ongoing compliance obligations. Providers who did not execute a digital channel strategy have in many cases faced lost domain knowledge and costly change management as new CDR requirements and technical advancements have been introduced.
The CDR's initial implementation posed significant challenges, most notably the misinterpretation of rules and technical standards and the complexities of sharing accurate consumer and product data with the CDR ecosystem. Data holders who adopted a lifecycle-centric approach ensured learnings were captured and operational processes put in place that would inform CDR management as it continued to evolve.
The technical and non-functional obligations of the CDR have also been a catalyst for many providers to (re)assess their business cases for technology investment in key systems, operational processes and human resources. These assessments have in many cases identified a need for material investment to ensure CDR obligations could be met, but also highlighted the opportunity presented to uplift systems, processes, and resources to ensure ongoing competitiveness of the provider's products and customer experience.
Another critical lesson learned from the CDR's initial rollout was the need for effective collaboration between technical, compliance and regulatory stakeholders. Navigating the technical and operational complexities of the CDR has and continues to require a deep understanding of the CDR rules, standards, and regulatory posture.
How compliance is assessed and demonstrated to both internal stakeholders and to the regulator has proven to be a complex and resource-intensive exercise if not well governed. Missteps have proven to be costly, with several data holders receiving formal direction to improve their compliance by the regulator and in some cases, enforcement actions.
As the CDR ecosystem continues to mature, the importance of having the right internal expertise, alongside trusted partners to manage compliance risk and cost is crucial.
