A new data protection regulation putting consumers back in control of their personal data will make relationships between individuals and organisations more controversial than ever
The online world is awash with data, much of which is shared freely by consumers.
So how will people react when presented with the opportunity to share highly confidential banking data in return for access to new or better services? And how will providers meet the challenge of creating data-driven services that build consumers' trust in their organisation?
"Customers will ask 'are you a company I can confidently share my personal hopes and dreams with – what I aspire to?'," says Louise Beaumont, Co-chair, techUK Open Bank Working Group and a strategic advisor to SapientRazorfish.
"Financial services providers must ask themselves whether they have the level of trust and permission from individual customers that allow them to feel comfortable about sharing those personal hopes and aspirations."
GDPR gives consumers a right to anonymity. So they can ask Facebook, for example, to delete them.
"But if I'm in someone else's phone and they synch their phone to Facebook, that data on me will still be there in Facebook – because my details are part of the other person's data, and not mine," says Simon James, Principal data scientist at SapientRazorfish.
Louise argues that GDPR poses the most serious threat to the tech titans such as Facebook, Amazon and Google whose business models "depend on indiscriminate data-harvesting".
"These regulations will raise public awareness of where customer data is and what it's being used for," she says.
"The restrictions of GDPR pose a huge challenge to the way tech titans have done business up to now. If individuals take charge of their data – and there's a serious market opportunity in helping people to do that – these companies are first in line to feel the effects."
Early research indicated that a significant group of users of the P2P lending site for businesses, Funding Circle, were uncomfortable with the need to disclose their company's financial information on the site to allow due diligence by investors.
But the quick and flexible access that Funding Circle provides to unsecured loans for small and micro-enterprises has proved so valuable that borrowers quickly overcame their concerns.
The big opportunity here for finance providers is to look for ways to use the data they hold to bring benefits to their customers.
It's one thing to know in advance from the patterns of behaviour revealed in a customer's transactional data that they're in danger of financial distress – it's another thing to have the level of trust and personal engagement that allows your organisation to communicate with them pre-emptively on a topic as sensitive as this.
"In a data-driven world, being profiled is the price of personalisation," says Simon. "If you want personalisation you need to let people surveil you."
Consumers must believe an organisation is acting in their interests – at least as much as its own – when it uses their personal data.
"Having this feeling of customer advocacy is critical," says Rashed Haq, Global lead for artificial intelligence at SapientRazorfish. "Without it, they'll risk looking like Big Brother."
specifies that data must be freely given, specific, informed, unambiguous and given via a clear affirmative action – pre‑ticked boxes registering consent are not accepted under the regulation
of people in Britain consider their current account balance completely private
of people in Britain consider their direct debits completely private
of people agreed that providing personal information is an increasing part of modern life