techUK Roundtable on Smart Data

Meeting Summary

techUK Roundtable on Smart Data

Online
14:30-16:00, 04/11/2020.

Chair: Louise Beaumont

Remarks from Siobhan Dennehy
Head of Economic Regulation, Consumer and Competition Policy at the Department for Business Energy and Industry Strategy (BEIS)

As the person leading the Smart Data workstream within BEIS, Siobhan outlined the key drivers of this work.

• Smart Data enables customers to simply and securely share their data with third parties, enabling third parties to provide innovative services and consumers make better choices.
• While the UK Data Protection Act gives consumers the “right to data portability”, it does not go far enough and cannot be classified as ‘Smart Data’. This means that data remains locked with incumbents, rather with the consumers or SMEs.
• The advantages of Smart Data can be simplified into two main objectives:

o   For competition – e.g. turbo-charged switching, better comparison of price and quality.

o   For innovation and new services – e.g. better access to affordable credit, better debt advice and management, enabling carbon footprint monitoring and management.

The Smart Data team within the Consumer and Competition policy group in BEIS works across all sectors but are initially focusing on a handful of regulated sectors where there are data portability initiatives in progress. These are:

1. Open Banking (with the Competitions and Markets Authority (CMA), HM Treasury and Open Banking implementation entity)
2. Open Communications (Ofcom and the Department for Digital, Media, Culture & Sport (DCMS))
3. Pensions Dashboard (Financial Conduct Authority (FCA) and the Department for Work and Pensions (DWP))
4. Open Finance (FCA and HM Treasury)
5. Midata (BEIS and Office of Gas and Electricity Markets (Ofgem))

The Smart Data workstream is closely connected to other work that is ongoing in the UK government including on Digital IDs, the Digital Markets Taskforce and the National Data Strategy.

There are also private sector projects such as Open Transport, the Open Savings and Investments Infrastructure (TISA) etc. which are unfolding in parallel.

Beyond these sectors, the government intends to open this work up to more areas. Last year the government consulted on which sectors Smart Data could be useful in and where should the government be focusing and supporting existing or future schemes. Building on these responses, in September the government published its response which included two announcements:

• Legislative announcement: To introduce legislation (when parliamentary time allows/next session in Spring next year) which extends government powers to mandate that companies participate in the Smart Data initiative. However, this is subject to consultation and evidence gathering.

Evidence from open banking was that it took a decade to pick-up steam. What made it really happen was the CMA Order and EU directive which provided impetus for change. The feedback gathered during the consultation process was generally supportive of this.

• Smart Data working group: Bringing together the public sector actors across those 5 schemes, the government departments, as well as the Information Commissioner’s Office (ICO).

COVID-19 has reaffirmed the urgency of having coordinated work across sectors. However, right now, there is no mechanism to easily spin up initiatives in non-existing sectors; Highlight areas of duplication and increased consistency makes sense. And Coordinate initiatives, helping initiatives navigate tricky policy areas like consent or liability

There is lots of scope for consistent cross-sector approaches to help innovators monitor and help customers. This working group, led by BEIS, will enable cross-sectoral coordination and encourage standardisation. Members announced in September include HMT, DCMS, DWP, FCA, Ofcom, Ofgem, CMA, ICO and more.

Remarks from Will Pinkney
Principal, Networks and Communications, Ofcom

• Ofcom sees its role as enabling access to the data in a form that firms can use to innovate to the benefit of customers.
• Earlier in the summer, Ofcom published a consultation (concluding on Tuesday 10th November) setting out objectives for a data mobility initiative in the communications sector (Open Communications) and an initial view on how it could operate. This consultation is a first step in the process and we are keen to hear from a wide range of stakeholders to inform our thinking and next steps.
• Ofcom is working with government to provide technical advice on its intention to legislate and enable the future development of Open Communications.
• As a regulator, Ofcom is not best placed to anticipate all potential applications of the data or how innovation might unfold. But it presented several potential use cases for Open Communications in its consultation, including on improved product comparison.
• Product comparison could be improved in several ways by third parties having better access to data:

o   ability to more accurately compare someone’s existing package to their usage

o   provision of more tailored recommendations, and

o   accurate comparison of how a new package compares to an existing one.

• Improved product comparison is not the only potential use case. Third parties could also use this data to help people manage their services (as in the mobile screens on the slide) and send them timely reminders when e.g. their price / contract status changes.

How would Open Comms improve how data is shared with third parties?

• Providers would have to share customer data with any accredited third party (currently they are not under any obligation to do so)
• Accredited third parties would also be able to access product data – this is particularly important in the comms market as this information is not readily available
• Data would be standardised, lowing barriers for third parties to use it
• Accredited third parties could access data from a range of sectors.

Ofcom believes that Open Communications could complement other Ofcom interventions e.g. ECNs and ABTNs, auto-switch in mobile and proposed new rules for broadband switching.

Ofcom plans to publish a statement summarising the responses to this consultation and setting out how we plan to proceed in the first half of 2021.

The regulator will continue to engage with a wide range of stakeholders in coming months – including communications providers, digital comparison tools and the wider technology sector, as well as other regulators with their own experience of improving data mobility.

Discussion

• The Cabinet Office is not explicitly mentioned as a stakeholder working on Smart Data, however, even with the ongoing unprecedented work on Covid-19 and Brexit, BEIS insists that the Cabinet Office is well engaged on the tech agenda. The Cabinet Office is, in fact, supporting departments to accelerate the process and agree the standards, not just the sectors of focus.
• The examples of innovation and competition which are outstanding at the moment would still lie within Open Banking as that is the most advanced initiative so far. A particularly best practice is using Smart Data in deposit schemes.
• The government is hoping to learn from Open Banking and reuse much of the thinking/transmit this across other sectors. In some sectors there may not need new specific solutions.
• There was a question on how the CMA’s work on platforms will intersect with the work on Smart Data. The CMA digital markets taskforce is considering questions around the institutional arrangements to support competition and platforms. One of the recommendations relates to the role of data mobility as a remedy to help competition. We can see a future where some of that data mobility relates to individual businesses or consumers getting access to data and switch to other platforms or so on, and given that it makes sense to map those to the structures.
• Questioned on ‘standardisation’, BEIS stated that shared technical standards or mechanisms is something that it will look forward to introducing in the longer term, however the government is not yet at that stage yet. BEIS is still focusing on its objectives and sectors to focus on. The work on standardisation will be done in partnership with industry.
• The regulator is needed to play a coordinating role and standardise how companies collect and provide data to third parties in order to make the process as seamless as possible.
• The regulator will also play a role in building trust with the consumer that they are sharing their data in a secure and controlled manner (consumers may ‘lose track’ of where their data is and who it is being shared with). Transparency will be important and part of the ‘deal’ with third parties to access/onward share consumer data.
• On the question of transparency, an attendee commented that while transparency is key, we need to be realistic about the degree of control consumers can reasonably have (and meaningful understanding they can maintain) when we are talking about an ecosystem of 10s or 100s of providers/services. Consent is a flawed model, even with enough transparency, and we need to consider whether additional baseline consumer protections are required.
• BEIS is currently focusing on a handful of regulator sectors only. Using Smart Data to improve public services may be an option in the future, particularly in the realm of health.
• For each of the sectors mentioned, the government anticipates a rigorous process of cost-benefit analysis and assessments to minimize the cost on the industry. This fits squarely within the government’s strong commitment to tech and digitization after the outbreak of Covid-19.
• Unsure whether there will be an ombudsman or procedure, however Ofcom and BEIS both acknowledged that there needs to be a backstop for people to appeal when they are harmed in any way.