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The Department for Business and Trade has (DBT) set up a Smart Data Council with the goal of helping consumers and small businesses lower their utility bills.
The council will work to find ways of extending smart data benefits to new sectors, making it easier for consumers and businesses to find tariffs suited to their needs, as well as reducing the loyalty penalty customers often have to pay when changing providers.
Currently, the loyalty penalties customers pay is £1,114 per household on average across mobile, mortgages and broadband.
The government believes that the secure sharing of customer data with authorised third parties could help improve utility services for customers. The smart data council plans to replicate the success of the open banking initiative, introduced in January 2018 when UK banks were required to implement the Competition and Markets Authority’s (CMA’s) open banking regulations.
This led to the development of application programming interfaces (APIs) in banking to give consumers more control over their accounts. Through these APIs, third parties and multiple finance firms can use a consumer’s data to recommend the best service, including bank accounts.
The end goal was to increase competition in a sector dominated by big financial services companies, and customer banking data is shared by the industry through APIs, with customer permission, enabling businesses to offer tailored products.
Business and trade minister Kevin Hollinrake said that smart data can be a “real game changer for consumers across the UK, potentially saving people hundreds or even thousands of pounds a year”.
“Our new Smart Data Council will build on the success of open banking and spearhead measures in sectors like small and medium-sized enterprises’ (SME) finance, energy and telecoms, increasing competition and putting more money in the pockets of consumers and small firms,” he said.
The Smart Data Council is made up of several government departments, including HM Treasury, the Department for Science, Innovation and Technology (DSIT) and DBT.
It also includes regulators such as Ofcom, the Information Commissioner’s Office (ICO) and the CMA, as well as industry and consumer groups such as techUK, Innovate Finance, the Coalition for a Digital Economy and Citizen’s Advice, among others.
Alex Tofts, broadband expert at Broadband Genie, an independent UK comparison service for home broadband, TV, landline and mobile broadband services, said the creation of the council was a “welcome move” as it’s “vital that consumers feel empowered and informed enough to switch broadband providers when their contact expires”.
“Sharing customers’ data with third parties has been a big success with open banking, and done well it could inspire greater competition and drive package prices – and the loyalty penalty – down,” he said.
“There is also the suggestion personalised pricing could be adopted, where individuals’ circumstances have an impact on the deals they’re offered. However, a far greater priority must be to increase the availability and awareness of broadband social tariffs on the market. There may be a place for tailored pricing, but it must never be allowed to restrict access to the internet for vulnerable customers.”
Read more about government and data:
- Designed in close collaboration with technology businesses, the UK government is re-introducing an updated version of its Data Protection and Digital Information Bill to Parliament.
- Alison Pritchard, deputy national statistician at the Office for National Statistics, says the new government Integrated Data Service enables tackling questions that we don’t yet know we need to answer.
- Data sharing: How can we make sure the UK is a world leader?