© The Financial Times Ltd 2016
FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The Financial Times and its journalists are subject to a self-regulation regime under the FT Editorial Code of Practice.
February 18, 2013 4:40 pm
The new digital economy’s biggest resource is data. From Google’s recording of internet search habits to Amazon’s storing of credit card numbers, companies are busy pumping and extracting data, all to grease the wheels of commerce.
But a few companies are looking at helping consumers regain control of their own data – an idea that, if it takes off, would redraw the power relationships of the internet.
The concept is spreading slowly, with a handful of start-ups offering “data lockers”, or secure areas online where consumers can collect and store personal information such as telephone numbers, employment details and utility bills. But the idea is not only to keep all this information in one place but also to give people more control over who gets to see it.
Shane Green, chief executive and co-founder of Personal, a US-based data locker service, believes eventually the era will come to an end where companies such as Facebook and Amazon hold vast stores of personal data, while individuals have little idea what data is held about them and where.
“If one e-commerce site stores everything about you and then gets hacked, you don’t know who has all your credit card details,” says Mr Green. “There is a lot of concern about security and privacy online, but there have not been many tools to do anything about it. Now, we are enabling people to go from talking about the problem to a solution.”
Maarten Louman, a partner at Qiy, a Dutch foundation that offers internet users secure personal data areas, agrees. “The average Dutch person’s information is on 1,500 databases, but you don’t know which these are and what it is used for,” he says. “People are bothered by it, but there is no alternative, private way to use the internet.”
A study of Dutch consumers commissioned by Qiy found that 80 per cent wanted to know more about who had their data and 85 per cent wanted more control over their data.
Data locker companies are starting with very simple offerings. Personal, for example, helps to automate the process of filling in online forms. Open an account with Personal and fill in details such as your social security number and bank account and the next time you are faced with yet another online form, the fields can be automatically filled in with a click of the mouse. This service is proving popular, for example, with students filling in the very long federal student loan forms supplied by the US Department of Education, Mr Green says.
Qiy, meanwhile, is working with Ernst & Young, the business advisers, in Belgium and the Netherlands, connecting employees’ details – such as salary and pension payments – to Qiy’s secure personal data system. Not only is it easier for the staff to view, Mr Louman says, but if workers are looking to take out a mortgage or buy insurance, they can give banks and insurers access to the minimal set of data needed. This speeds up the process of credit checking and eliminates the need to send paperwork such as payslips back and forth through the post.
Eventually, however, both Mr Green and Mr Louman are dreaming of something bigger – an internet that revolves around the personal data locker, where companies that want access to personal data can be invited in by consumers, but the information exchange happens on the consumer’s terms. Qiy has set itself up as a foundation, rather than a company, to give its personal data infrastructure independence from commercial pressures.
“If I want to buy a new bike, I tell it to the world and let companies make me offers based on my preferences. Once I have the bike, I can close [the locker] again,” says Mr Louman.
Colin Strong, an analyst at GfK, the research company, says people are already becoming more conscious of the value of their personal data. “There will be an increasing trade in personal data and this will usher in an era when people recognise that it has value,” he says. “Brands that get high disclosure of data from their customers may find those customers demand more in return.
“A generation has willingly handed over personal data for good service, but in some cases [people] may have been underselling themselves. Companies will have to consider whether it is a good enough trade,” he says.
Mr Green believes consumers could make $1,000 a year in savings and benefits. An insurance company, for example, can already pay hundreds of pounds to acquire a new customer. Part of the valuation of companies such as Google and Facebook is based on the number of users they have. If customers could transact a few of their own data deals – agreeing to receive a targeted advert, for example – they should be able to share a little of the financial value, he argues.
Getting companies to hand over the data they hold on customers may be difficult, but initiatives such as the UK’s Midata programme could help.
Under this scheme customers would be able to request that companies hand over the personal data they hold about them. Among the signatories to Midata are credit card companies Visa and MasterCard; Three, the mobile phone network; banks Lloyds TSB and Royal Bank of Scotland; and British Gas and EDF Energy, the utility companies.
Midata is still voluntary, however, but the UK government would consider putting it into law if there is insufficient take-up within a year. Last year, the European Commission also proposed new data protection laws that would strengthen individuals’ rights over their own data.
Mr Strong says the government pressure has the potential to give data locker businesses a “rocket boost”. Qiy, which has attracted just 40,000 users to date, is expecting to sign a deal under which a large European cable services operator would promote it, accelerating growth. “It may take another five to 10 years to establish the idea,” says Mr Louman, “but it is growing fast.”
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.