Russia’s VTB and Rostelecom focus on big data

Russian financial services and telecoms enterprises to create a platform that will allow them and other organisations to utilise big data technology

Russian telco Rostelecom and state-run banking and financial group VTB are launching a big data platform and will offer it as a service to other organisations.

The two companies signed an agreement in November, and the initial investment in the project was set at RUB1bn ($15.7m), split equally.

“The new platform will facilitate the structuring of big data collected in the economy’s various sectors and, based on it, the building of digital solutions that correspond to contemporary market expectations,” said Andrei Kostin, VTB’s president and chairman of the board.

“I am sure that the improving of the quality and accessibility of big data is one of the chief factors for successful development of a digital economy in Russia.”

At the heart of the joint venture will be a big data platform open to all interested participants in sectors such as telecoms, financial services, retail and construction, as well as public sector organisations.

All data added to the platform will be checked for legality and quality, and will be anonymised and encrypted.

Alexei Chamaiko, business development director at Rostelecom, told Computer Weekly that the platform will use cryptographic technologies that “are required to achieve integrity, confidentiality and privacy of data”.

VTB and Rostelecom plan to collect various kinds of data, including consumers’ age, gender, purchasing history and movements. Possible uses for the platform include the creation of algorithms for attracting and retaining customers or measuring creditworthiness.

Adding more partners

So far, VTB and Rostelectom are the only participants in the venture, but the two companies envisage adding more partners, such as providers of depersonalised data or developers of big data solutions, and they do not rule out acquiring firms operating in that field.

“The platform will operate as a set of services and technologies that will allow any participants complying with the legislation, and the platform’s terms and conditions, to exchange big data,” said Chamaiko.

“The platform won’t store any data. All data will be stored on the participants’ side. They will only be able to exchange depersonalised and non-personalised data.”

Systems for big data processing, storage, analysis, exchange, visualisation and ad campaign management will be built on top of the platform.

The platform is expected to be able to process data of any kind at participants’ requests, while participants will be able to choose between analytical algorithms and have full control of the outcome of processing, said Rostelecom.

Artificial intelligence (AI) will be used to analyse data added to the platform. VTB and Rostelecom have both been testing AIs and will contribute their expertise in the technology to the big data platform.

At the platform’s pilot stage, data from four or five participants, including Rostelecom and VTB, will be added to the platform.

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The two companies would not reveal the other participants, but Russian media reports suggest that companies with links to VTB and Rostelecom are likely to be among the first customers.

These include mobile phone operator Tele2, food retailer Magnit, which is 18.3% owned by VTB, and Pochta Bank, in which VTB has a stake of almost 50%.

Some firms with no connection to the platform’s founding partners, including broadcaster National Media Group, the Russian Post and the food retailer X5 Retail Group, have also been mentioned as prospective participants.

One of the platform’s main functionalities will be the opportunity for participating companies to exchange data, said Chamaiko.

“If the platform’s participants decide to grant access to data, the platform will provide services required for that, ensuring confidentiality, security and privacy,” he added.

VTB group, in which the Russian government has a near-70% share, runs almost two dozen banks and financial companies operating in more than 20 countries.

Rostelecom is a leading provider of telecom services, including fixed-line and mobile phone services, internet access and pay TV.

VTB and Rostelecom are not currently connected to each other, but VTB’s sale of a 50% share in mobile phone operator Tele2 to Rostelecom – scheduled to be completed by April 2020 – will make the lender the owner of a 17% stake in the telecoms giant.

Work in progress

Work on the platform is currently in progress, and it is expected to be launched some time this year, said Rostelecom.

Big data is one of the technology trends that Russian companies and the government have both been enthusiastic about recently, realising that collecting as much information as possible about individuals would facilitate sending them more precise advertising and even political messages.

Several companies have already been venturing into big data. An alliance similar to that of VTB and Rostelecom, albeit on a smaller scale, is being run by mobile phone operator MTS, controlled by the Sistema group.

Since early 2019, the mobile phone operator has been collecting data on its customers, as well as on those of MTS Bank, its electronics retail chain and entertainment services.

Analysis of big data has contributed to the fact that the number of loans issued by MTS Bank nearly doubled in the April-June period, year on year, said MTS.

Russia’s largest lender, state-run Sberbank, has also been experimenting with big data technology.

However, concerns have been raised in Russia that, in the absence of proper regulation, big data could be misused.

To address that issue, a number of major players in the sector, including VTB and Rostelecom, as well as lenders Gazprom Bank and Tinkoff, mobile phone operators MegaFon and Beeline and internet majors Yandes and Mail.ru Group, signed an ethics code on the use of big data in early December.

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