"Reporting is abysmally small. It is absolutely inevitable this will be made mandatary," said Daniel Foggo, the chief executive of RateSetter Australia, one of only a few companies reporting its data publicly. Fintechs are set to benefit from a mandated regime as it will give them better data to assess loan applications.

'Hardship flag'

The financial system inquiry in 2014 said better credit data would reduce information imbalances between lenders and borrowers, facilitate switching of accounts, and increase competition among lenders. It also said the regime could reduce the likelihood that loans will default, reduce interest rates and increase the availability of credit.

ARCA chief executive Mike Laing said the industry is now looking to the government for clarity that any mandated regime will adopt the same scheme the industry has been developing and not create additional requirements.

ARCA said that 30 per cent of accounts, or around 9 million credit files, have some positive data being reported in "pre-production mode", meaning they've been tested by the credit bureaus but the owner of the data has not chosen to switch them into live mode.

The industry had been concerned about how customers in hardship would be reported but this has been clarified.

Banks are now wanting to introduce an additional "hardship flag" into the system that would identify when a hardship request has been granted, and therefore identify customers in hardship seeking to shop around. The Productivity Commission asked the Office of the Australian Information Commissioner and Australian Securities and Investments Commission to consult with other regulators, industry groups and consumer advocates to consider whether this is necessary.

The commission also asked for Treasury to get responsibility for monitoring and publicly reporting on a regular basis on participation in CCR.

If CCR is mandated, customer owned banks have called for a materiality threshold of $200 billion in assets on the basis the costs of participation are likely to outweigh the benefits for smaller credit providers.

Meanwhile, the Attorney-General's Department told the commission mandating participation in CCR could "raise constitutional issues around the acquisition of property", given credit information could be considered "valuable commercial information"; the commission said this should be investigated by the government.