Adatree’s Guide to Action Initiation in the CDR


It’s official – Action Initiation is here! The Treasury just released the first draft of the changes to the legislative framework needed for the much anticipated Action Initiation component of the Consumer Data Right.

This means we now have a clearer understanding of the framework, roadmap and functionality that will bring to life the CDR’s most powerful innovation since the regime launched in 2019.

The intention for Action Initiation has been there from the start and, as we saw at the 2022 Fintech Australia Intersekt conference, the market has had eyes and ears on The Treasury to see when the legislation would be released.

The Adatree team has always known that Action Initiation will be a game-changer for digital innovation and the Australian economy. That foresight is what drove us to build our award-winning CDR platform with Action Initiation in mind from the outset.

The CDR regime just got a whole lot more exciting – and Adatree is so ready for it!

But first things first. If you’re one of the many who have heard the term Action Initiation and still aren’t sure what it even means, you’re not alone. Here is a quick overview of the what, the why and the how of Action Initiation.

What is ACTION INITIATION and how does it relate to CDR?

The simple answer: The current CDR framework allows you to access consented data. Action Initiation – or write access – will extend functionality to allow you to initiate actions on your customer’s behalf.

If CDR data sharing is the window into a consumer’s data, Action Initiation is the doorway through which you can enter and manage their affairs.

Examples include:

  • Applying for products
  • Closing accounts
  • Updating customer information
  • Initiating push payments (NPP, Osko)
  • Initiating pull payments (PayTo)

Action Initiation would introduce a new ‘Action Service Provider’ – think Data Holder – API Interface that would allow ‘Accredited Action Initiators’ – think Accredited Data Recipients – to submit action requests on a consumer’s behalf (if the consumer gives explicit consent). The Action Service Provider would then act on these instructions where authorised by the consumer to do so. If this sounds familiar, it’s because this is the same process currently used for CDR data sharing!

What are the benefits?

Action Initiation will drastically elevate the services you could provide your customers. For instance, CDR data sharing currently enables a PFM to show consumers all of their finances in a single spot. With Action Initiation though, consumers could freely move money between their accounts, make and schedule payments, deposit additional funds into their super account and even add new registered payees to all of their banks through a single platform.

Rather than providing a window into your customers’ finances, you can now provide them with the front door through which they can enter and manage all of their affairs.

The benefits of Action Initiation have already been proven in overseas markets. For example, the UK’s tax department HM Revenue and Customs has used Action Initiation to allow citizens to pay their taxes using their own Open Banking system. It’s fast, secure, easy-to-use and bolsters consumer choice and confidence.

Where will Action Initiation be rolled out?

Implementing Action Initiation for banking actions, like payments, is an obvious first choice since the banks have already been integrated into the CDR system and these actions would deepen the usefulness of CDR datasets that are already available. Combining the ability to initiate variable, ongoing payment initiation with economy wide data sharing will let Australia’s FinTechs, payment providers, retailers and anyone else qualified to participate offer services not possible anywhere else in the world.

Though payments is a great example, the opportunities from Action Initiation in the banking sector are practically limitless. Think account switching, adding new payees, closing accounts and more!

What is needed to make ACTION INITIATION a reality?

As mentioned above, Action Initiation will use the same framework as we currently see for CDR data sharing, except the only action currently available is ‘share data’. This means Action Initiation will likely be able to reuse the CDR’s existing groundwork, allowing it to be rolled-out much faster than if it were being built from scratch.

There are still regulatory and technical changes that need to be worked through, including updates to the legislation and Rules, new data standards, and implementation work by any Action Service Providers. But by releasing the first wave of consultation, the Government has made clear that Action Initiation is well underway.

Adatree has been leading the way as the experts in CDR regulation, so you can be certain we will remain the premier solutions provider for all CDR expansions – Action Initiation and beyond! Our regulatory and technical gurus will also be lending our expertise to The Treasury and providing our recommendations in the coming weeks. (Watch this space…!)

So how does it work?

Here’s an example of Action Initiation… in action.

Action Initiation Use case: Account Concierge

No one wants to miss out on a good deal, but staying on top of all the new banking options is simply not an option in today’s fast-paced living. Thankfully, Account Concierge – a new financial app powered by CDR data sharing and Action Initiation – has you covered.

When you sign up to Account Concierge, you give them your consent to access data relating to all of your bank accounts through the CDR. At the same time you also give them consent to initiate actions on your behalf including moving money between these accounts, adding new payees, applying for new products, and closing accounts you no longer want.

Account Concierge is then able to use your data to optimise the allocation of your money in each account for maximum returns, and automatically moves money between your accounts without you needing to do anything. Account Concierge also keeps an eye on what new products are coming to market and identifies any that are more likely to help you achieve your financial goals. When it finds something suitable, it can either automatically apply for the product on your behalf, or notify you of the new product and anticipated benefits so that you can review the terms of service and initiate the application yourself. Once your new account is set up, Account Concierge moves across all of your existing funds and closes any unnecessary accounts you may have left behind. Simple as that!

This is only a simple example of the use cases Action Initiation will enable, and yet it demonstrates just how massive the benefits of this new functionality will be.

So if Action Initiation is coming, how should businesses prepare?

If you’re already engaged with CDR, that’s great! You’re ahead of the curve. But given we’re now commencing the consultation phase, it’s very likely that Action Initiation will be available in the near future. Digital implementations take time, so now is the time to be considering how Action Initiation could benefit your customers or operations to stay ahead of that curve. Because if you’re not thinking about how to integrate Action Initiation into your service offering, your competitors probably are.


Ready to learn more?

Adatree is committed to proactively developing our platform to ensure the graceful integration of CDR extensions like Action Initiation. If you’re ready to explore how CDR could help you provide smarter solutions and simpler processes for your consumers, get in touch with our team.