analysis

How Midata will affect business and consumers

Kathleen Hall

As the government pushes private companies to release customer data under its Midata initiative, Computer Weekly looks at what this means for the digital economy and who stands to benefit most from this new form of "consumer empowerment".

The government's Department for Business, Innovation and Skills has singled out energy companies, mobile phone firms, banks and payment companies as key organisations that should release customer data to allow consumers to make more informed decisions under its Midata initiative.

Under the proposals, companies are being compelled to release data about consumption or transactions in an electronic machine-readable format on request. For example, energy companies will be encouraged to release data to consumers so they can make more informed decisions about which tariffs to use.

Nigel Shadbolt, chair of the programme since last April and information adviser to the government, began the initiative as he believed a shift was occurring in the way people control their data.

Having machine-readable information makes the process of price comparison more frictionless, and could allow for cross-service integration through apps, as opposed to entering personal data by hand which creates a drop-off as people cannot bear to keep re-entering details, according to Shadbolt.

“The thought was this is going to be an absolute catalyst for new services, and we wanted to encourage the private sector to get more coordinated,” he said.

Some retailers have already cottoned on to the benefits of giving consumers more choice in how they use their information

Shadbolt believes the Midata initiative is seen as a threat to some of the incumbent retailers, which have traditionally hoarded customer information to gain valuable insights into consumer spending behaviour.

“It sounds like a one-way deal for a lot of companies, until you explain that it actually creates a two-way channel, with the customer talking back about their information,” he said.

“There is a realisation for businesses that this creates opportunities, with businesses seeing less churn by having a conversation with customers, and better data as consumers help them to clean up the information they have,” he added.  

Some retailers have already cottoned on to the benefits of giving consumers more choice in how they use their information. Tesco, for example, announced My Clubcard to get users to interact with their own data.

Selective Midata

The government singled out the three core sectors – energy, mobile and finance – as the areas in which consumers would most benefit from price comparison information. 

Some 20 companies have already signed up to the Midata scheme, including Visa, Mastercard, Three, Lloyds, RBS, British Gas and EDF Energy.

But Nick Pickles, director of civil liberties group Big Brother Watch, questioned whether consumers ought to have access to their own information across all sectors, particularly as these rights already exist under the Data Protection Act.

“Should government be deciding which sectors consumers should be having access to? Location data is also not covered under these principles, but from a privacy perspective that is some of the most important data,” he said.

“Also, when a consumer uploads their information, what guarantee will they have that the company doesn’t just delete their name and anonymise that information as a way of profiling customers,” he added.

Owen Boswarva, open data activist, warned there is a danger of consumers being blasé about their information being passed on to third parties. He said the potential risks were in danger of being de-emphasised.

“On the face of it, this is presented as being an unalloyed good thing, and you can’t argue with having more access to data. But it will depend on the checks and balances in how this is implemented,” he said.

Boswarva said he would like to see additional processes built in to ensure data is handled properly.

“There is a peril in conflating the concepts of open data and personal data, which I feel the government may be doing,” he said.

Shadbolt agreed that open data and personal data should remain separate, with the former openly available to everyone and the latter preserved for private use.

He said where third parties are coming in to make use of data, clear rules about opt-in need to be applied.

But Shadbolt added there are some obvious areas where the use of open data and personal data could be usefully integrated, such as being able to put your own information against open data on schools.

Although the scheme is voluntary, legislative action will be considered if the proposals do not take effect after a year.

Shadbolt said he would welcome this move if need be, but does not expect it will be necessary. “Over the next year, I’d expect more companies to get involved. This is a growing sector,” he said.


Image: Thinkstock


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