Open Banking
What you need to know

The ACCC officially defines the various accreditation models as the following:
Sponsor / affiliate model – The sponsored level of accreditation is for persons with or who intend to have an arrangement with an unrestricted accredited person who is willing to act as their sponsor in the CDR regime.
Prinicipal / CDR representative – Persons who wish to use CDR data to provide goods or services to consumers, but who do not wish to participate in the CDR as an accredited person, may enter a CDR representative arrangement with a person accredited at the unrestricted level (the principal). For example, an accredited fintech could provide packaged CDR services that are designed to be sold by representatives on the condition that the CDR data will remain within the fintech’s CDR data environment. In this ‘agency-like’ relationship the principal will collect CDR data on behalf of the CDR representative. A CDR representative may only have one principal.
Insights – allows the disclosure of certain limited CDR data, known as ‘insights’, to any person (whether accredited or not) provided the disclosure is for one of the purposes specified in the CDR Rules.
Trusted Adviser – allows the disclosure of CDR data to approved professionals such as
accountants, lawyers, financial advisers, financial counsellors and mortgage brokers.

CDR Open Banking data collection and Digital Data Capture (DDC) are effectively two different methods of obtaining financial data – both methods use APIs to extract the data. Whilst CDR legislation provides the mechanism and consumer protections to support ‘open data’, it is not the only enabler of fintech innovation. Innovative financial products and services, whether it be budgeting apps or better online banking experiences, are already widely available and adopted thanks to digital data capture services.
DDC or ‘screen scraping’, has evolved over the years and from a security standpoint there is little difference between using APIs as opposed to direct data capture methods. Both encrypt traffic over a HTTPS connection and both require an exchange of information for a token to complete the authentication process (login/pass vs API key) – meaning they are almost identical in nature.
The main advantage of using Open Banking APIs is that the data received is more structured, thus reducing time-to-development (especially when retrieving data from multiple financial institutions). It also provides prescribed guidance on handling of data and reduce the potential of misinterpretation.