The Optus data hack and other high profile breaches have cast a cloud over the willingness to share information through the consumer data right (CDR) as the Government prepares to roll it out more widely, Financial Rights Legal Centre Policy and Advocacy Officer Drew McRae says.

“I think government is going to have to take a fresh look at CDR to tighten it up to make sure that people feel comfortable with it, because the truth is, they’re not comfortable with sharing the data now,” he told the Insurance Council of Australia annual conference.

The CDR gives consumers the right to share their data between service providers of their choosing, aiming to help with product and service comparisons and making transactions simpler and more convenient.

The regime has been introduced in banking and is commencing in the energy sector, while other areas of finance including insurance are targeted for an expansion of the arrangements.

Mr McRae said concerns that had already emerged included arrangements where information can be passed to a trusted adviser not accredited under the CDR.

EY Port Jackson Partners Partner David Harrington, who has looked at the CDR as part of work with the insurance industry on innovation, said there were issues to be resolved.

“I think one of the biggest challenges facing the industry is around affordability trying to get simplicity, trying to get transparency,” he said.

“My sense, doing the work with the industry on the CDR, is that the industry is actually open to seeing the CDR being a vehicle that creates more transparency, more competition and some standardisation, but I think they’re really concerned around, ‘let’s make sure that it’s robust and secure’.”

Mr Harrington said low take up of CDR by customers in banking also pointed to the importance of designing a system that achieves value for customers and also for insurers.

“The last thing we want is to reconfigure the whole data structure for the industry and find that we only get 5% of customers,” he said.

Mr McRae said ideally CDR will offer benefits and increased transparency around how risks are priced for policyholders and the industry should see it as an opportunity to solve the known issues that consumers have with insurance at the moment.

“That means ensuring it can be used to make sure people get a better idea of the risks that they have, and to make sure that they get the cover that will cover those defined risks,” he said.