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Our future: data in Australia

Data sits at the core of banking. From customer insights to risk management, it helps banks understand what customers want and how they can meet demand effectively. Further, customers can benefit from access to data concerning them.

Because of the importance of data to Australia in general, the Productivity Commission is looking at important questions concerning access to public and private data. The core issue is how can Australia make better use of its vast stores of data?

" If policy settings seek to increase data availability, they must also ensure businesses continue to have investment incentive. "
Dr Martin Joy, Senior Manager, Global Regulatory Change, ANZ

The Commission’s inquiry is part of the Australian Government’s fintech agenda and stems from recommendations in the Murray Inquiry into our financial system and the Harper Review into competition policy.

ANZ has contributed to the Commission’s work. Our submission concerned the policy settings which the Commission should consider in making private-sector data available.

Our key point was banks already make substantial amounts of data available to customers, the public and regulators. From digital channels allowing customers to access their transaction histories to public reporting and responses to regulatory requests, banks offer significant amounts of the data they collect, process and store securely.

Further, we think the voluntary availability of data will only increase as customers demand more access to data and initiatives, such as comprehensive credit reporting, come online.  Service offerings based on data will become critical competitive advantages in the digital economy.

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BETTER DECISIONS

Our submission also recognised, however, other jurisdictions have introduced laws and powers that could mandate forms of data availability. In the United Kingdom, for example, the government has the power to identify key industries and mandate they make personal data sets available.

The policy thinking here is customers will be able to take that data and use it to make better purchasing decisions. For example, data on how a customer has used a mobile phone could help identify the best phone plan for them.

The key tension with increased data availability, however, is data collection, storage and protection is a massive investment for many businesses.  

Businesses make this investment in the hope of benefiting from it. If policy settings seek to increase data availability, they must also ensure businesses continue to have investment incentive. 

Without it, businesses may scale back data efforts, reducing the amount of data to the detriment of customer offerings and perhaps society at large.

To help solve this policy tension, ANZ has argued there are three key interests in data which need to be recognised and aligned in a modern, digital economy:

• The interests of individuals in their own privacy and dignity with respect to data concerning them businesses hold;

• The commercial interests of those who invest in generating, collecting, organising, protecting, analysing and making available data (termed data custodians); and

• Society’s interests in the benefits which could arise from greater availability of private sector data.

INTERESTS ALIGNED

ANZ’s core argument was these interests will be best aligned if the Productivity Commission can identify the correct bundle of rights that should attach to data (ie. who can do what with data). 

Calibrating these rights correctly could help incentivise data custodians to make greater investments and voluntarily make more data available. 

We argued the Commission could consider improving rights in data drawn from databases.  Current Australian law has limitations in protecting data drawn from databases. 

Overseas initiatives have attempted to fix these limitations through new rights in databases. If Australia were to adopt similar rights, data custodians could more confidently invest in and licence out useful data sets to the benefit of the economy and society.

In contrast, mandated availability could as discussed chill investment in data generation, pose issues of equity between competing commercial interests and raise questions concerning data security.

With the Australian Government estimating close to one million Australians fell victim to online identity theft in 2014, data security will be critical to ensuring individuals trust government and business in collecting, storing and using data about them.

No doubt there’ll be many voices in the discussion concerning data availability. In today’s digital age we are all aware of the power of data to help us, our businesses and our government. 

The Productivity Commission has flagged a report in November 2016 with recommendations in March 2017. It’s a fascinating inquiry with potentially major implications for our economy and society.   

Dr Martin Joy is Senior Manager, Global Regulatory Change at ANZ

You can read ANZ's full submission to the Productivity Commission here.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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