Photo: iStock
Photo: iStock

The many perks of using critical consumer user data for social benefit

Handling critical data to prevent misuse is a complex and expensive task

Business models that thrive on user data have created profitable global technology companies. For comparison, market capitalization of just three tech companies, Google (Alphabet), Facebook and Amazon, combined is higher than the total market capitalization of all listed firms in India. Almost 98% of Facebook’s revenue and 84% of Alphabet’s come from serving targeted advertising powered by data collected from the users. No doubt, these tech companies provide valuable services to consumers. It is also true that profits are concentrated with private corporations and societal value for contributors of data, that is, the user, can be much more significant.

Internet users experience targeted advertising everywhere: ads for buying airline tickets show up when you search for images of Bali beaches, and a smart TV set on an e-commerce site that you casually clicked on follows you on every website.

In the existing economic construct, private firms are able to deploy top scientists and sophisticated analytical tools to collect data, derive value and monetize the insights.

Imagine if personalization at this scale was available for more meaningful outcomes, such as for administering personalized treatment for diabetes, recommending crop patterns, optimizing water management and providing access to credit to the unbanked. These socially beneficial applications of data can generate undisputedly massive value.

However, handling critical data with accountability to prevent misuse is a complex and expensive task. What’s more, private sector players do not have any incentives to share the data they collect. These challenges can be resolved by setting up specialized entities that can manage data—collect, analyse, provide insights, manage consent and access rights. These entities would function as a trusted intermediary with public purpose, and may be named “data stewards".

DATA STEWARDSHIP

Data will be an enabler of solving global challenges such as climate change and public health. Governments’ open data combined with data from the private sector and willing individuals can yield game-changing insights.

Private tech platforms have shown positive intent with their “data for good" campaigns. For example, in India, Facebook has shared maps with non-governmental organizations and researchers that can help health partners better fight disease outbreaks. Expanding on these one-time efforts, a mechanism to manage data with appropriate safeguards can be enabled through various types of data stewardship.

Aapti Institute, a tech and society think-tank in Bengaluru, conducted research to landscape all global examples. Their findings were encouraging: Globally, over 100 such examples of data stewardship already exist. Some models include data exchanges for smart cities (Amsterdam City Portal, Indian Urban Data Exchange) and data trusts (Truata by Mastercard, MiData).

Each model provides different types and scale of data aggregation, consent management, value realization and safeguards. India’s Account Aggregator focuses on empowering individuals with their data by enabling them to digitally consent and share their financial data with a potential loan provider.

These new models of unlocking value from data will solve three critical challenges: First, data stewards can create transparency and trust about secure usage of data. Second, there is a paucity of institutions that possess specialized skills and resources required for handling data safely. Third, catalysing “data for public purpose" will need evangelization across entrepreneurs, who will build innovative solutions; data holders who will make existing data available; and individuals who will need to sign up for new services. Data stewards can play the role of network builders, along with being a trusted intermediary.

The missing piece of this puzzle is the absence of scalable models that can enable stewardship without conflicts of interest. Existing arrangements are mostly funded by public money, which are not set up for scale. There is room for optimism though, as we see in the positive experiments with the 100 global examples of stewardship. Perhaps, some of them will achieve the scale that has been demonstrated by the private tech corporations, and that is essential for solving complex global challenges.

Sushant Kumar is principal at Omidyar Network India.

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