Masters of their own data: banking, privacy, and the trusted network
It’s not just financial institutions that have a data problem—just ask anyone who has tried to correct an error with a credit bureau report. Whether in clicking the “I agree” button on unread user agreements, or in the form of information generated through the mining of oblique data sources, most of us have little to no control over our personal data, and with it, our privacy.
Regulatory and technological drivers
Some jurisdictions, particularly in Europe, are trying to address the problem through regulations—such as the “right to be forgotten” or the General Data Protection Regulation (GDPR)—with the goal of empowering consumers to reclaim some control over their information. These regulatory strategies can be useful, but technology is also bringing tools that make it not only easier to respond to regulatory requirements, but also, conceivably, to make them unnecessary.
What’s becoming clear is that data privacy represents an untapped opportunity for financial institutions. By virtue of their unique position in society and the economy, couldn’t they (and perhaps shouldn’t they), help us secure our privacy as they secure our assets? And, couldn’t that become a new profit center for banks and other financial institutions?
Identity and data
The key lies with our identities—specifically, our digital identities—and the data linked to them. What’s beginning to emerge with technology innovations like blockchain and AI is the potential for returning data ownership back to rightful owners, giving them far more control—and then layering on top of that intelligent services that help individuals and institutional customers make sense of it, protect it, and act on it.
In other words, with their own blockchain-powered digital identities—which would be unique, secure, and immutable—customers could become the masters of their own data. They could selectively grant access—whether in whole or in part, persistently or temporarily—to different aspects of their digital identities and financial information. Financial institutions, for their part, would make use of advanced analytics and AI to offer their customers more control over their data, adding value with useful insight and proactive, contextual services.
The opportunity for banks
The benefit to financial institutions would be at least three-fold:
- They will spend much less of their precious IT budgets trying to secure and manage their customers’ data—and honor concomitant regulatory requirements, while adding value to customers.
- They will be able to devote more resources to becoming highly secure and agile platforms that offer tailored products, value-added services, secure infrastructure, focusing increasingly on new business models and opportunities.
- They will earn, as guardians of their customers’ privacy and as trusted intermediaries in interdependent banking networks, their customers’ enduring trust and loyalty.
At Microsoft, our approach applies technology in unique ways—with a trusted cloud platform, tools, and services that empower business agility and enable a new vision of cybersecurity for the industry. As your trusted technology partner, we offer both industry know-how and enterprise-grade solutions. We can help no matter where you are on your digital transformation roadmap.
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