Would you allow someone you trust to find a great financial deal – and take it for you automatically? Introducing Action Initiation. 

When consumers can freely access their data, they will ask for help. This demand will create a new class of advisors who, with Action Initiation, a new part of the Consumer Data Right, not only advise you of the best deals, but also take them for you.

If your brand stands for something more than price you continue to compete as you do now. If you sell an undifferentiated commodity and rely on consumer inertia in any way, you may want to think about adding value somehow or face an automated race to the bottom on price.

An agent who never sleeps, looking for and taking the best deal, must impact the mental and physical awareness models central to growing brands? Especially since these models work because we are lazy consumers. And when you can get a broker-sourced best deal automatically, who needs a cash back loyalty program?

The fuel?

Australia’s Consumer Data Right (CDR) was launched in 2020, driving the principle that consumers also own the data that organisations have about them. Since it is yours, you have the right to access it, to basically do what you want with it, including giving it to others who can use it to your benefit. CDR provides the regulatory framework that includes a wide range of consumer data, supports consumer choice, supplies unbelievable levels of convenience, and is bullet-proof safe.

Banking was first, for all Australian banks, and the ACCC says the implementation there is complete. Energy is active now, in November 2022 “Consumer data-sharing commences for customer data held by the Australian Energy Market Operator, AGL Energy Group, Origin Energy Group and Energy Australia Group”. Telecommunications comes next in what will eventually be an economy wide opening of data to their access by consumers.

Open Banking in the UK was earlier but less ambitious, but it does include one key function; the ability for consumers to initiate payments, initially a missing component in the CDR.

The Australian Treasury will complete the picture, releasing draft legislation on 26 September 2022 that will allow credentialed parties to instruct organisations to take specific actions on your behalf. Same as if you instructed your bank / energy company / telecommunications supplier yourself.

“Action Initiation” allows trusted parties to inform you of choices you should consider, based on your data, then ‘make it so’.

Consumers can effectively grant ‘Power of Attorney’ to trusted, smart, relentless guardian apps who do not sleep. These apps will need to earn trust and compete with consumer inertia, so many will offer reward programs to get your attention and entice you to sign up.

Exciting times if you are in the loyalty business.

Open banking in the UK began with consumer payments included, this temporary gap in CDR is addressed by the Action Initiation announcement. Implementation will take 12 – 18 months, enough time for enterprising developers to build competitive platforms for consumers.

We can’t wait.

A new class of platform vendors will materialise, using your data (and trust) to optimise your banking, power, telco, insurance, superannuation, etc., leaving you time for a life.

First off-the-mark could be the existing comparison/aggregators, Finder, iSelect, Compare the Market, Make it Cheaper, Canstar etc., and the ratings company Choice should consider expanding its services. Finder are already certified CDR Data Recipients (as Hive Empire Pty Ltd) as are CBA, NAB, Westpac, BOQ, so switching may get easier.

Impact on loyalty programs

‘Cash back’ reward programs are growing in number and membership, a sign that consumers are hardening to points-based loyalty, outside travel programs and credit cards?

Action Initiation can disrupt this model; why pay more than you should, just to then get a refund that you share with the operator. In future you can provide data and intention with a broker who always gets you the best deal, for an agreed fee.

The broker model is already popular for home loans, car purchases, and financial advice where consumers get what they pay for, transparently.

The most confident and competent broker apps may even agree to reward you for your trust and only pay themselves a modest share of the savings they deliver, or it is free.

Give it a year or so for the functionality to be implemented but start planning your customer loyalty strategy for data abundance, trust scarcity now.