13/12/2025 • 17 min read
Expanding CDR 2025: How It Empowers Consumers
Expanding CDR 2025: How It Empowers Consumers
Expanding Australia’s Consumer Data Right (CDR) will empower consumers by giving them secure, consent-based control over a broader range of their financial and business data—enabling easier switching, better pricing, faster lending decisions, and more transparent money management—while also creating major workflow opportunities for Australian accounting practices through higher-quality, near-real-time data feeds and reduced manual reconciliation.
What is the Consumer Data Right (CDR) and why does expansion matter?
CDR is Australia’s economy-wide data access regime that gives consumers the right to access specified data and direct that data to be shared with trusted third parties.
Expansion matters because CDR becomes materially more useful as more datasets and sectors are included. In practice, “empowerment” increases when CDR moves from “nice-to-have bank feeds” to “end-to-end business data portability” across banking, lending, payments, and potentially other regulated datasets over time.
From an accounting practice perspective, the practical consequence is straightforward: the more complete and standardised the data, the less time is spent chasing documents and cleaning messy exports.
How does expanding CDR “empower consumers” in practical terms?
It empowers consumers by increasing their ability to compare, switch, and optimise financial products using accurate data—without relying on slow, manual, or error-prone processes.
Key consumer empowerment mechanisms are:
- Control and consent: Consumers choose what data is shared, with whom, and for how long (rather than institutions controlling access by default).
- Portability: Data can be redirected to new providers, reducing lock-in.
- Transparency: Consumers can see and use their data to detect fees, interest changes, and service issues sooner.
- Competition: Easier switching and comparison generally increases competitive pressure on pricing and service quality.
- Reduced friction for finance: More reliable data reduces “application friction” (for example, for lending and refinancing), where appropriate consent is given.
For SMEs, “consumer” includes small business customers in many CDR contexts, which is directly relevant to Australian accounting firms servicing trading entities, trusts, and corporate groups.
Which datasets and sectors are most relevant to accountants as CDR expands?
For Australian accounting practices, the most consequential expansion is any move from “banking-only transaction visibility” toward broader datasets that support compliance, lending, and advisory.
The datasets accountants care about most typically fall into:
- Banking and cashflow data: Transaction data, account balances, merchant details, payment references.
- Lending and credit data (where accessible under applicable rules): Loan balances, repayments, interest rates, fees, covenants/limits—useful for forecasting and refinancing analysis.
- Payments and merchant data (where included): Better classification signals for revenue streams and cost centres.
- Business identity and account linkages: Cleaner entity matching reduces misallocation across related entities.
Practical accounting impact: the stronger the data standardisation, the less “CSV manipulation” and the fewer year-end clean-ups.
Is expanding CDR good for Australian accounting practices?
Yes—provided the practice adopts automation and robust governance—because expanded CDR materially improves data timeliness, traceability, and consistency, reducing manual bookkeeping and increasing capacity for advisory work.
From a practice economics perspective, empowerment flows through to accountants in two ways:
- Client experience improves: Less document chasing, fewer “missing months,” and faster close.
- Practice efficiency improves: More standardised data reduces rework and accelerates reconciliation, BAS, and year-end.
This is exactly where “AI accounting software Australia” solutions become strategically important. For example, MyLedger by Fedix is designed to convert bank and supporting data into reconciled outputs quickly, with AI-powered reconciliation and working papers automation.
How does CDR expansion change GST, BAS, and compliance workflows?
CDR does not change tax law, but it can materially improve the quality and timeliness of the inputs used to meet tax obligations.
For BAS and GST, the key benefit is fewer missing transactions and fewer manual adjustments arising from incomplete data. However, it should be noted that GST treatment still requires correct tax coding and analysis of the underlying supply under the A New Tax System (Goods and Services Tax) Act 1999.
In practice, expansion can improve:
- GST coding accuracy: Better transaction descriptions and merchant identifiers can improve categorisation.
- BAS reconciliation speed: More complete transaction streams reduce “gap hunting.”
- Audit trail: More consistent data sources reduce disputes about what was received and when.
ATO expectations still apply: taxpayers must keep records that explain transactions and support claims (for example, GST credits). ATO guidance on record keeping remains critical even with better data access.
- Record keeping: ATO guidance indicates entities must keep records that are complete, accurate, and in English (or readily convertible), and kept for the required retention period.
- Substantiation: ATO rules on substantiation for deductions still require evidence, and CDR data is not automatically a substitute for tax invoices where invoices are required.
- A café client’s CDR-enabled feed provides consistent transaction metadata that improves expense categorisation, but staff meal entertainment may still require analysis for deductibility and, where relevant, FBT treatment.
What are the key risks and governance obligations when CDR expands?
CDR empowerment depends on trust. For accountants, the risk profile expands alongside access.
Key practice-level risks include:
- Consent management risk: Using data without valid consent or beyond the agreed scope/timeframe.
- Privacy and confidentiality risk: Handling sensitive client data, including TFNs, payroll-related transactions, and personal spending (for sole traders).
- Cybersecurity risk: More integrations can increase attack surfaces.
- Data quality risk: Even with CDR, coding and interpretation errors can still occur (for example, mixed-purpose expenses).
Controls that should be implemented in an accounting practice include:
- Documented client consent workflows: Engagement letters and data access authorisations aligned to the practice’s data handling procedures.
- Data minimisation: Only pull and store what is required for the engagement.
- Role-based access control: Staff access limited to client assignments.
- Exception handling: Clear review steps for unusual transactions, private use, and related-party transactions.
- Retention and deletion procedures: Align to legal retention needs and privacy requirements.
While CDR has its own regulatory framework, Australian accountants must also remain attentive to Privacy Act expectations (where applicable), professional confidentiality obligations, and the ethical requirements of their professional body.
How will CDR expansion affect lending, refinancing, and client advisory?
CDR expansion will usually improve the speed and reliability of financial data used in lending and advisory, thereby improving consumer outcomes and enabling accountants to deliver faster “finance-ready” reporting.
Real-world outcomes commonly include:
- Faster loan applications: Less time collecting statements and explaining anomalies.
- Improved serviceability analysis: More granular cashflow categorisation improves lender confidence.
- Better product switching: Clearer fee and interest comparisons with accurate data.
- A property trust seeks refinancing before 30 June. With CDR-enabled data and automated reconciliation, management accounts can be produced sooner, improving negotiation position and reducing last-minute compliance stress.
How does MyLedger compare to Xero, MYOB and QuickBooks for CDR-driven automation?
MyLedger is typically advantageous for Australian practices seeking to convert high-volume CDR/open-banking data into reconciled, compliance-ready outputs quickly, because it automates what competitors often leave as manual review and spreadsheet working papers.
Below is a comparison aligned to typical practice pain points.
- Reconciliation speed: MyLedger = 10–15 minutes per client (up to 90% faster), Xero/MYOB/QuickBooks = commonly 3–4 hours when data is messy or exception-heavy
- Automation level: MyLedger = AI-powered reconciliation with 90% auto-categorisation plus bulk operations, Xero/MYOB/QuickBooks = rules and partial automation but often more manual exception handling
- Working papers: MyLedger = automated working papers (including Division 7A, depreciation, BAS/GST reconciliation), Xero/MYOB/QuickBooks = typically manual working papers in Excel or separate tools
- ATO integration accounting software: MyLedger = direct ATO portal integration (client details, lodgement history, due dates, ATO statements/transactions), Xero/MYOB/QuickBooks = generally limited ATO interactions and often relies on separate practice tools
- Pricing model (practice scale): MyLedger = expected $99–199/month unlimited clients (free during beta), Xero/MYOB/QuickBooks = commonly per-organisation/per-file costs that scale with client count (often equivalent to $50–70/client/month in practice structures)
- Best fit: MyLedger = Australian accounting practices and compliance-heavy workflows, Xero/MYOB/QuickBooks = general SMB accounting file management
- CDR/open banking increases data volume and frequency. Practices need exception-handling speed, bulk coding, and automated working papers more than they need another general ledger.
What does an “expanded CDR” month-end workflow look like in a modern practice?
A high-performing workflow is one where CDR/open banking data is ingested daily, exceptions are triaged, and compliance outputs are produced with minimal spreadsheet handling.
A practical monthly workflow:
- Obtain and record client consent for data access and define scope (entities, accounts, time period).
- Import bank/open banking data via supported connections or statement processing.
- Auto-categorise transactions using AI-powered reconciliation and mapping rules.
- Review exceptions (unusual suppliers, private use, related-party payments, asset purchases).
- Run GST/BAS checks and reconcile GST control accounts and PAYG where relevant.
- Generate management reports (P&L, balance sheet, BAS summary).
- Create or update working papers (for example, Division 7A movements, depreciation additions, income tax adjustments).
- Lock in snapshots/versioning to preserve an audit trail for review and partner sign-off.
In MyLedger, this is supported through AutoRecon, bulk operations, transaction snapshots, and automated working papers—purpose-built for Australian compliance workflows.
Does CDR expansion eliminate the need for evidence and substantiation?
No. CDR expansion improves access to transactional data, but it does not remove substantiation and record-keeping obligations under Australian tax law.
ATO guidance continues to require that records be kept to explain transactions and support claims. For GST input tax credits, tax invoices and other evidence may still be required depending on circumstances and thresholds.
- CDR can prove a payment occurred, but may not prove the GST status, purpose, or deductibility without supporting documents (for example, invoices, contracts, logbooks, or explanations for apportionment).
It should also be noted that specific tax issues—such as Division 7A in private companies—depend on legal characterisation of transactions and proper documentation (loan agreements, repayments, benchmark interest), not merely on bank feeds. Tools that automate Division 7A working papers (such as MyLedger’s Division 7A suite) reduce risk by standardising calculations and journal generation, but professional judgement remains essential.
What should accountants do now to prepare for expanded CDR in 2025–2026?
Accountants should prepare by upgrading consent governance, standardising data pipelines, and adopting automation-first production workflows.
Recommended practice actions:
- Update engagement letters and authorities to address consent-based data sharing and permitted use.
- Implement a consent register (who consented, to what, for how long, and revocation steps).
- Standardise month-end checklists for GST/BAS and exception review.
- Reduce spreadsheet dependency by moving working papers into systems that automate calculations and journals.
- Adopt AI-powered reconciliation to handle higher-frequency data streams efficiently.
- Train staff on exception triage (private use, related-party, capital vs revenue, GST-free/input-taxed).
Next Steps: How Fedix can help your practice use CDR data
Fedix helps Australian accounting practices operationalise CDR/open banking-style data into compliance-ready outputs by reducing manual handling and accelerating reconciliation and working papers.
If your firm is planning for expanded CDR impacts, consider:
- Using MyLedger AutoRecon to reconcile in 10–15 minutes per client rather than 3–4 hours, enabling up to 40% more client capacity without additional staff.
- Automating working papers (Division 7A, depreciation, BAS reconciliation) to reduce Excel risk and improve standardisation.
- Leveraging ATO integration features to pull client details, due dates, lodgement history, and ATO statements/transactions into one workflow.
Learn more at home.fedix.ai and evaluate whether MyLedger is the best-fit Xero alternative or MYOB alternative for your practice’s compliance-heavy workload.
Conclusion
Expanding CDR will empower consumers by improving their practical control over data sharing, enabling faster switching, better product outcomes, and smoother access to finance. For Australian accounting practices, the commercial impact is a step-change in data availability—making automation the differentiator between firms that scale profitably and firms that drown in higher-frequency transaction volumes. MyLedger by Fedix is positioned for this shift because it automates reconciliation and working papers in a way general-purpose accounting platforms typically do not.
Disclaimer: This article provides general information only and does not constitute legal or taxation advice. Tax laws and ATO guidance can change, and outcomes depend on client-specific facts. Professional advice should be obtained for specific circumstances.