Smart data sharing offers ‘valuable opportunity’ to help vulnerable customers

The sharing of smart data within and between sectors offers a “valuable opportunity” to help vulnerable consumers, the government has argued in a new report.

The Department for Business, Energy and Industrial Strategy (BEIS) said it could allow charities and debt advisors to quickly gauge their financial position and provide more personalised guidance.

The report titled ‘Smart Data Working Group: Spring 2021’ covered the secure sharing of information with authorised third parties upon customers’ request and outlined the potential benefits and use cases of smart data in banking, finance, communications and energy.

It said this information could be used to provide innovative services such as automatic switching or improved account management.

Ofgem has launched the Midata scheme to share data in the energy sector, although its development has been paused while the regulator enacts other retail market programmes.

The report said smart data presents a “valuable opportunity” to improve services for vulnerable consumers who find it more difficult to engage in markets.

Charities and debt advisors could use banking and finance information to measure their income, and data from energy and communications to track their regular utility expenditure.

This would allow them to understand consumer’s overall financial position “far quicker” than current conventional methods and provide more personalised debt advice.

“The need to develop these services quickly and easily highlights a further argument for interoperable data sharing across sectors,” it added.

Responding to the report, Matt Cole, head of the Fuel Bank Foundation charity, warned that data used in this way must be treated with the “upmost privacy”.

Cole added that it also essential that data is allowed to flow back to utility companies as information collected by a charity may be more accurate.

He told Utility Week: “On principle, I agree that having ready access to accurate and recent data absolutely allows people or organisations supporting others to potentially provide more meaningful advice or intervention.

“That said, it’s important that such data is treated with upmost privacy and that customers really understand what data may be being accessed, and agree to how it will be used and stored.

“Fuel Bank Foundation analysis has highlighted that less than 10 per cent of customers who are experiencing extreme crisis would contact their energy supplier, relying on trusted third parties and local charities instead.

“It’s essential therefore that, with consent, data can flow ‘back’ to the energy or comms company too, since at times the information collected by the charity may be more accurate and could absolutely help future decision-making within the company itself.”

Current governance arrangements enable smart data initiatives to develop independently of one another, with BEIS responsible for policy coordination.

The report proposes three different options for evolving the current cross-sector working group arrangements to develop greater opportunities for cross-sector coordination:

• Extending the duration of the existing smart data cross-sector working group. This option is the least resource intense and least coordinated approach.
• Establish a cross-sector Smart Data Council – building a voluntary, non-statutory council with a wide cross-sector membership. This would provide an opportunity to involve a cross-section of industry, consumer interests and technical experts.
• Establish a board to lead a Smart Data Council – providing government with advice and recommendations on cross-sector issues. This is the most resource intensive, but would achieve the greatest level of coordination.

BEIS said initial feedback suggests a stronger interest in a Smart Data Council but added it wishes to gather wider views over the coming weeks.