The Consumer Data Right (CDR) is one of the most value-adding changes to the way businesses receive, use, and share data. Yet, many small business owners have never heard of it, let alone understand how it works or how it could benefit them.
As the CDR continues to expand to more businesses and industries, while introducing new ways for everyday Australians and small business owners to make smarter purchasing decisions, this is the opportunity SMEs cannot afford to miss.
What is the CDR?
If you have ever wondered whether your electricity bill would be cheaper if you shopped around, or if you could get a better car loan if you knew what all the other service providers were offering, then the CDR was designed for you.
It’s no small task to research financial services providers, dig into what their various services are, compare appropriate services in a like-for-like comparison, and then make a decision that would tangibly decrease your bills or otherwise improve financial outcomes. The CDR was implemented by the government to take those headaches away, while also adding the reassurance that the information being researched is accurate, up to date, and competitive.
In short, the CDR is a regulation that makes it mandatory for certain businesses to publicly share data, making it easier for their customers to compare products and access better services. It is currently active in the banking and energy sectors, and was recently expanded to non-bank lenders as well.
What does the CDR do for SMEs?
Let’s look at an example where Company A wants to reduce their electricity bill. Before the CDR, it would have been normal for Company A to do a search online, call several providers, calculate the difference in options, and then make a decision. The process could take several hours and, in all likelihood, would be put in the ‘too hard basket’ and not get done for months. It was time-consuming, complex, and there was still no guarantee they were accessing all the information needed to make the best decision.
Now with the CDR, Company A can opt in to share data with an energy savings app, review their options within seconds, get presented with several up-to-date and accurate options to help make a fast and easy decision, and switch to a new provider with a few clicks. In this version of events, Company A’s owner is not only likely to get this off their to-do list early and quickly, but they can also repeat this simple process any time they would like to search for a better deal. The process takes minutes instead of hours.
As well as enabling speed and ease of switching banking, financial or energy service providers, the visibility and accessibility of data help businesses make better decisions. SME owners no longer have to carry the stress of wondering ‘what if?’ when wondering whether they are getting the best deal for their business.
Furthermore, as more SME owners catch onto the capabilities and benefits of the CDR, and as more customers start to compare their service providers, those impacted industries will be under increased pressure to deliver the most cost-effective and valuable products in the market. SME owners have enough on their plates, and knowing that competition is rising to keep some of their biggest bills as low as possible can be a game-changer in enabling them to focus on their core business activities.
When it comes to the CDR, SME owners shouldn’t be put off if they do not understand every detail of how it works. It’s an opt-in service designed with strong privacy and security protections and, most importantly, to enable better access to more cost-effective services for small businesses and consumers. In a cost-of-living crisis, there is a lot to gain and nothing to lose by engaging with the CDR.
