Australia’s Consumer Data Right
Established in 2017, Australia’s ‘Consumer Data Right’ (CDR) was world leading in its breadth and scope. Instead of solely targeting the banking sector, the legislation gave consumers the right to share their information across the economy.
Championed by Australia’s Treasury Department, Open Banking regulation was the first open data initiative to be implemented and follows a similar model to that of the UK and Europe. The depth of the data available is impressive, with consumers sharing transaction, saving, term deposit, credit card, mortgage and personal loan data.
Today Open Energy is in the process of being enabled with an expected go live date in November 2022 with Open Telecom due to follow in 2023.
Benefits of Open Energy
Beyond Open Banking, open data within the Australian energy sector will put energy account and consumption data in the hands of consumers.
Similar to Open Banking, these regulatory changes create opportunities for energy companies and new entrants to move closer to their customers by increasing customer value, creating new solutions and redefining competition in their markets.
From November 2022, Open Energy will start with Australia’s major energy suppliers, followed by the smaller players, all of which will be required to make data sharing available as part of the CDR.
Like Open Banking, consumers will be able to access their energy data and make it available to third parties. Data will include:
- Meter type data;
- Customer name and contact details;
- Billing data including bills issued and payments received; and
- Battery and solar panel details.
Short-term use cases include personalised and embedded comparison and switching, account management services, bill consolidation for payment services and financing for solar installations, battery storage, electric vehicles (EV) and home EV charging stations.
As the onset of Open Energy becomes a reality, we’re likely to see a change in the way energy suppliers differentiate themselves and acquire customers. Open Energy will enable new business models that deliver tailored propositions to suit individual customer needs beyond the domestic supply of energy with many suppliers exploring a shift to Energy-as-a-Service (EaaS) business models.
EaaS will see customers pay for an energy service without having to make any upfront monetary commitment. This model could take the form of a subscription for electrical devices owned by a service company or the management of energy usage to deliver the desired energy service. For example, a supplier may package up the supply of energy, solar panels, battery storage, an electric vehicle (EV) chargepoint and EV leasing into one monthly payment. The customer can in turn reduce their carbon footprint, remove any upfront costs and achieve greater savings over a longer period of time. For the supplier they will increase customer lifetime value by boosting margins and retention periods.
Cross sector collaboration
EaaS business models will create opportunities for the entire open data landscape to be slowly stitched together. Open Energy data will help to identify a customer’s needs and tailor a suitable proposition.
Open Banking already allows for affordability assessments to be conducted leveraging aggregated data across multiple bank and credit accounts.
Open Finance will allow for innovative funding solutions to be presented to the consumer allowing them to navigate the decision making process with ease and take action in a seamless, end to end experience.
New acquisition models
The methods in which energy suppliers will bring new products to market is also likely to change. We anticipate energy suppliers will move away from traditional acquisition channels such as comparison websites and establish strategic partnerships with organisations that can amalgamate segments of the open data ecosystem as a means of acquiring new customers.
It’s also likely that suppliers will partner with retail banks and fintechs offering attractive commercial terms to engage with their existing customer bases. Readily available KYC, banking and financial data coupled with Open Energy data will allow consumers to make decisions on their financial wellbeing (including utility costs) in an environment where they already manage their money.
EaaS offerings come with additional environmental benefits that not only support customer ambitions but align with the strategic ESG objectives of the majority of financial institutions.
Having learnt from Open Banking initiatives forged by experiences in the UK and Europe, Australia is set to blaze a trail in Open Energy and Telecommunications. At Youtility we continue to keep abreast of global open data developments and remain ready to take advantage of evolving use cases in the UK and abroad. If you are a bank or fintech and would like to learn more about this growing opportunity, please get in touch.