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At a Senate committee hearing, representatives from Australia New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and Westpac, alongside the Australian Banking Association (ABA), told senators that direct access to verified income information would help lenders move away from relying on documents such as payslips, which have become increasingly vulnerable to manipulation.
Under Australia’s open banking regime, the Consumer Data Right (CDR) allows consumers to securely share banking data with accredited organisations. Banks are now pushing to extend the framework to include customer-consented ATO income data.
The push comes as the banking industry grapples with a rise in fraudulent loan documentation and alleged mortgage fraud.
Several major banks, including CBA and NAB, have recently expanded investigations and counter-fraud operations in recent months, while The Australian Financial Review has reported the scale of mortgage fraud in Australia could be as high as $4 billion.
The issue is also increasingly affecting brokers, with Equifax research showing almost three-quarters of Australian mortgage brokers were impacted by scams or fraud in the 12 months to September 2025, up from 26 per cent a year earlier.
Banks push for trusted income verification
NAB executive home lending platforms Matt Dawson said the bank welcomed the government’s commitment to explore ATO data sharing through the Consumer Data Right (CDR), which was promised during the announcement of the federal budget.
“This would allow banks to rely on a single source of trusted data,” he told Senate committee chairman Senator Andrew Bragg.
“It would streamline and accelerate loan applications. It would strengthen fraud detection. It would also deliver broader productivity benefits and customer outcomes.”
Similarly, Westpac’s chief operating officer for consumer banking Damian MacRae said: “The risk is real... we see the opportunity there for sharing government data through the ATO as one of the ways that we can restrict fraud that we’re seeing currently within the mortgage system.”
Nonetheless, MacRae acknowledged that take-up of open banking had been “extremely low” despite years of investment but said that “leveraging a single source of truth” would help build trust with the consumer and kick-start the technology’s uptake.
Currently, around 1.3 million Australians are using CDR. The CDR, as well as the technologies it facilitates, is still moving forward. Most recently, the CDR was extended to the non-bank sector.
“We don’t have a decisioning issue at the moment. We have a verification issue,” MacRae said.
“This would reduce time to verify. It would reduce the amount of paper that our consumers and our customers are having to provide us... and... we’d be able to manage fraud and reduce the level of fraud we’re seeing within the system.”
AI proving a ‘double-edged sword’
The committee also heard artificial intelligence is becoming both a powerful tool for fraudsters and one of banks’ strongest defences.
Westpac chief economist Luci Ellis said the proposal was not a response to widespread mortgage fraud today but an attempt to stay ahead of rapidly evolving technology.
"This isn’t about the system as we have it now... The issue is that this is a new technology. It’s developing quickly. People are learning how to use it and so this is about heading off a problem that could become much bigger."
CBA chief risk officer for the retail bank Robert Parker added: “AI works on both sides of the fence. It clearly gives bad actors a more scalable, efficient way to find and exploit attack vectors. But for CBA, we’re also using AI to our benefit in relation to prevention and disruption.
“We’re scanning millions of transactions a day, sending more than 40,000 alerts to customers where we think there is suspicious activity or we’re unsure and want to check that it’s actually them, and blocking suspicious transactions as well. It is a double-edged sword.
“There’s a tremendous amount we can use to fight this kind of crime. On the other side of the fence, it’s a strong attack vector that allows them to scale."
NAB has also called for a National Economic Crime Strategy, warning that increasingly sophisticated, AI-driven fraud is outpacing individual institutions.
CCR showing the way?
While the banks argued Consumer Data Right (CDR) could help tackle mortgage fraud by providing access to verified ATO income data, the industry is already pointing to the success of comprehensive credit reporting (CCR) as an example of how broader data sharing can improve lending outcomes.
Comprehensive credit reporting was introduced to give lenders a more complete picture of a borrower’s financial position by allowing a broader range of credit information to be shared during the assessment process.
Figures released by industry body Arca this week showed participation in the Principles of Reciprocity and Data Exchange framework has nearly tripled since 2020, with 137 organisations now contributing data covering more than 22 million consumer credit accounts.
Consumer awareness of comprehensive credit reporting has also increased, with 64 per cent of Australians surveyed saying they had obtained a copy of their credit report, up from 47 per cent in 2020.
Elsa Markula, chief executive officer of Arca said: “The experiences shared by participating lenders show how comprehensive credit reporting is supporting more informed lending decisions, stronger competition and improved outcomes for consumers."
[Related: ‘System-wide problem’: Brokers back co-ordinated response to fraud threats]
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