Productivity Commission puts data control in customer hands
In a draft report, the Commission has recommended that consumers, not incumbents or fintechs, should control their own data.
The Productivity Commission has today released a draft report into data use and availability, a long-contested issue in the startup sector. The recommendations made by the Commission centre on giving consumers more power over the data held on them, sharing data in a secure way when deemed necessary and creating a national data system, overseen by a data custodian.
The report was underpinned by a belief, long held in the fintech sector, that data is becoming increasingly valuable.
"The principle that underpins this Inquiry is that data is now a valuable asset – not an overhead, or a privacy issue, but an asset," the report said.
The recommendations did not go so far as to establish access to data through an open API. Instead, the report said it was "essential" that organisations hold the ability to vet and control third-party access to their aggregated datasets, but also price access under commercial agreements that "reflect the commercial value of data in a data-sharing transaction."
Speaking specifically about fintechs, the report said empowering consumers to direct their data to third-parties would be a better way of solving the problem rather than directly intervening.
"Access to the data holdings of incumbent firms would undoubtedly help a new firm, but this is not a socially or economically desirable role for governments. As long as business-to-business sharing already goes on, and consumers or markets are not suffering obvious harm from misuse of power, governments should not intervene at the firm level."
The Commission outlined four key elements of its recommended approach to reform:
- Giving individuals more control over the data held on them
The Commission recommended that giving more access and more say to consumers on data that is collected on them could "give individuals more control over the information held about them, affords individuals more choice about the products and services they consume and is an avenue to improve market competitiveness."
As part of this recommendation, the Commission says a definition of consumer data, which includes personal information, online data and data associated with third-party transactions or activity, needs to be introduced. Giving consumers edit powers, the right to stop collections and the ability to request a data transfer was also proposed.
- Enabling broad access to datasets that are of a national interest
Wider access to high-value datasets across and between sectors can deliver benefits that extend beyond the collector or holder, according to the report.
"Digital data can be combined, re-used, transformed and added to in ways that create new and additional value without diminishing the value to the initial collector and holder of the data."
A National Interest Dataset (NID), which is a subset of high-value datasets, has been proposed, as well as the establishment of an Office of the National Data Custodian to oversee these datasets. Examples of NID outlined in the report include land use data, property and transport data, data on service provider performance and financial systems data.
- Sharing publicly-funded identifiable data with trusted users
This recommendation involved sharing publicly-funded identifiable data with trusted users in secure computing environments. The aim of this proposal is to provide "greater access for entities to data that does not have a public face, but is nevertheless of critical value to a smaller group of trusted users."
Access would be granted on a project-specific basis and would occur in a secure computing environment using internal servers. In line with keeping the power to the individual, responsibility for ensuring use of the dataset is consistent with the project's approach would rest with the trusted user.
- Releasing non-personal and non-confidential data for widespread use
"Other data" refers to data that is not related to individual people or businesses but should be routinely available for use by governments, consumers, businesses and the research community. It includes information that is already in the public domain.
The report proposes a shift away from only releasing non-confidential data and towards pushing out data in a coordinated way.
"Such an approach has the potential to make a marked difference to the range and volume of data available for decision making, innovative activity and improved service delivery in the community."
- Australian alternative finance market explodes, now second largest in Asia Pacific
- Invoice financing heavyweight Waddle expands to NZ
- finder fintech roundup: Crowdfunding, ETFs, Jacaranda Finance and bank branches
- Macquarie Bank open banking platform a first for Australia
- Government moves forward on crowdfunding legislation