Diversity and Inclusion - best laid plans
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Out-Law News | 17 Feb 2014 | 3:30 pm | 4 min. read
Sean Tomlinson, head of consulting and propositions at IT consultancy Steria, told Out-Law.com that adoption of the Government-backed 'midata' initiative may have stalled because businesses are wary of revealing that they hold inaccurate or incomplete customer data.
The 'midata' scheme requires voluntary signatories to provide consumers with access to their personal data in a "portable, electronic format". The 'consumer data' principles that midata adopters adhere to include making the data available in "an open standard format" that is "reusable" and "machine-readable" in as standard form as is possible across sectors.
The initiative, established by the Government in 2011 and backed by major brands such as Google, Royal Bank of Scotland, British Gas and Visa, is intended to allow consumers to be able to access their information quickly and be able to use the information the businesses provide them with to "analyse, manipulate, integrate and share" the information "as they see fit".
However, in a recent Parliamentary debate, Labour MP Stella Creasy recently said that the voluntary midata regime had "struggled to have any impact" because "companies have little incentive to release commercial data that could convince a customer to go elsewhere". She called on the Consumer Rights Bill, currently passing through Parliament, to be amended to force businesses to "unlock" such data.
The Government is currently undertaking a review of the adoption of the midata initiative and is due to report in March on its progress. In the recent Parliamentary debate, Minister for Business Jenny Willotts said that the report would help the Government decide whether to "require companies to release the data they hold on consumers".
The Government has backstop powers, under the Enterprise and Regulatory Reform (ERR) Act, to force energy suppliers, mobile network operators and current account and credit card providers, or any other group of organisations, to provide customers with access to their electronically-held transaction data.
Tomlinson said he believes some businesses have been reluctant to sign up to the midata regime due to fear of "exposing the poor quality data" they hold about customers.
"When you see obvious inaccuracies in the data that you provided you start to lose trust in the integrity of those organisations and their ability to use that data on your behalf," Tomlinson said.
Businesses will find that where they do not have "really good quality data" they will not be able to market effectively to those individuals, he added. Consumers will be likely to turn to rival providers where businesses mis-target offers at individuals as a result of poor quality data, he said.
As consumer pressures drive demand for more transparency about how their personal data is used, the Government is going to become ever more likely to legislate to require businesses to meet those demands, Tomlinson said. However, he warned that businesses that treat the midata regime as a compliance exercise risk missing out on the benefits that can be derived from sharing customers' personal data with them more freely.
Individuals already have the right to request access to the personal data organisations store about them under the Data Protection Act. Tomlinson said, though, that businesses can derive more benefit from proactively disclosing customers' data to those individuals.
"If you only ever treat it like a compliance project it can only ever be a cost to you," Tomlinson said.
Businesses can turn data sharing with customers into an advantage for them, he said. He pointed to the forthcoming smart metering boom as offering opportunities to energy companies to provide additional services to customers based around returning personal data to those individuals.
Energy suppliers could "demonstrate their green credentials" by using their "mechanism for catching and returning data" to allow customers to gauge the energy consumption of individual household appliances and gadgets and make suggestions over what goods those customers could buy to reduce that consumption and their bills, he said.
Tomlinson also said companies are also increasingly turning to "gamification" as a way to interact with consumers and improve their customer service and brand recognition. He cited the mobile app that one insurer has produced that performs like a "telematics box with a screen" and allows customers to volunteer information about their driving.
The app helps "creates a bit of competition" between individuals and allows the company to build up a "potential bank of customers" on the basis that the individuals may be attracted to the possibility of lowering their car insurance premium through the monitoring of their safe driving, Tomlinson said.
The examples chime with what Tomlinson said was an increasing move by organisations towards an 'as-a-service' model, where businesses seek to differentiate themselves from rivals based on good customer service as opposed to price. Businesses that can therefore show that they are using customers' data to offer services that are to those customers' benefit stand the best chance of being successful, he said.
Tomlinson said that businesses would generally not need to undertake a major overhaul of their IT systems to make customer data more available. He said most businesses will already capture and use the data that could be made available for their own purposes, and that there would only likely be some "basic project costs" to be incurred in making that customer data public in a way they can benefit from.
However, Tomlinson said that a major culture change may be required, particularly within major regulated businesses where information and customer responsibilities may be "siloed", to ensure businesses keep up with customer demands for control over the use of their data and that they do not lose out to "smaller, more agile" competitors.
Diversity and Inclusion - best laid plans
Fintech meet up