Arca, the peak industry association focused on the use of credit reporting and consumer data, has made a comprehensive submission to the Economic Reform Roundtable calling for the modernisation of Australia’s credit reporting system as a priority productivity reform.
The association urges the roundtable to consider its suggested reforms, warning that Australia’s current credit reporting framework significantly lags behind international standards, and that expanding the system would drive economic efficiency, boost competition, and deliver better outcomes for consumers.
“Australia’s credit reporting system is outdated and limited compared to other developed nations,” said Elsa Markula, CEO of Arca. “Modernising credit reporting represents a significant opportunity to boost productivity through better data access and streamlined lending processes, yet we’re falling behind our international counterparts.”
Arca’s submission outlines three priority reforms that would bring Australia’s credit reporting system in line with global best practice:
Enhanced data inclusion: Adding more comprehensive data types to credit reporting, including balance information and richer repayment data, would improve lending decisions and support better consumer outcomes. Research shows 60% of consumers support easier and faster loan application processes.
Fraud prevention improvements: Replacing the current consumer ban system with more sophisticated fraud flag systems would better protect consumers whilst maintaining system efficiency.
Small business support: Exploring credit reporting for small and medium enterprises through a government-industry working group could significantly support the SME sector, which employs 7.4 million Australians and contributes $700 billion to the economy.
The submission strongly critiques the recent independent Review of Australia’s Credit Reporting Framework, arguing its recommendations would hamper economic resilience through rigid data minimisation and create unnecessary fiscal burden on taxpayers.
“If implemented, the independent review’s recommendations would miss critical opportunities for productivity gains,” Ms Markula said. “Rather than restricting credit reporting, we should be focusing on catching up to global standards and unlocking the economic benefits that come with a modern, comprehensive credit reporting framework.”
Arca emphasises that modernising credit reporting would benefit both industry and consumers by enabling more informed lending decisions and greater competition amongst lenders.
“These reforms aren’t just about improving efficiency for lenders – they’re about creating a system that works better for all Australians,” Ms Markula added. “A modernised credit reporting system would support financial inclusion, help consumers access credit on more competitive terms, and contribute to overall economic resilience.”
With the Economic Reform Roundtable commencing on 19 August, Arca is calling on the government to consider these industry-backed reforms as part of its broader productivity agenda.
Arca represents 95% of all consumer lending in Australia through its membership, including 14 of the nation’s largest banks, mutual banks, consumer finance companies, fintechs, and credit reporting bodies.