The UK midata initiative aims to give consumers better access to the electronic personal data that companies hold about them. It will have a significant impact on business processes, operations and IT systems.
This white paper is written by Sopra Steria's Head of Consulting, Private Sector.
Led by the UK Government, the midata initiative is also being shaped by a number of leading companies. While the Government will ensure legislation and compliance, private enterprise will drive innovation and business focus. Businesses will need to develop strategies that encompass both these aspects of midata. Those companies that merely follow and comply are likely to lose out in this new digital marketplace.
midata is part of a complex and rapidly evolving environment; a new data-rich space in which customers do business with their providers based on their personal information. As the scope and complexity of customer data grows, business will make increasingly sophisticated and innovative use of this data. It is extremely likely that industry-specific bodies will be established to influence this development. Therefore it is important that businesses establish early and effective strategies for how they will be part of this change.
The impact of midata will be rapid. Savvy consumers will very quickly learn how to use it to drive the best deals. Equally savvy businesses will use it to personalise products and services down to individual customer level. While many organisations have initiatives that are underpinned by the message “putting the customer at the heart of our business”, midata will make this real. Managing and serving customers at an individual level will become fundamental to success.
The driving force behind midata is to compel companies to give back to consumers their personal and transactional data in a standardised, portable electronic format. Consumers can then use this data in any way they see fit, such as forwarding it to competitors or third parties for quotes. The expected outcome of this is an explosion in services and products that will use this data, empowering consumers, promoting competition and driving the development of innovative products and services.
midata is a UK Government-led initiative from the Department for Business, Innovation & Skills that is being undertaken with leading businesses and consumer groups. It initially covers three main sectors, energy, mobile telecoms and consumer banking (both current accounts and credit cards). The Government has also expressed a desire to expand the sectors covered at a later date to include retail, other telcos, media and financial services.
A brief history and background to the legislation
The midata initiative was launched in November 2011 on a voluntary basis. 26 leading companies including Visa, Google, British Gas, Lloyds TSB, O2 and moneysupermarket began working with government to shape and move forward the programme.
A public consultation period began and reported back in November 2012. This consultation recommended that the initiative be put through primary legislation, which was passed in April 2013 as part of the Enterprise and Regulatory Reform Act.
This primary legislation gives the Information Commissioner, or an agent thereof, the power to legally enforce the compliance of companies with the midata initiative. A review is currently underway to assess both the progress made voluntarily and the wording of regulations to enforce compliance.
What companies are already involved with midata Initiatives?
Many of the leading companies in the UK have committed to be actively engaged in midata work, for example:
Figure 1: The midata inititative timeline
(See a text version of this non-text image)
midata innovation lab
The midata Innovation Lab was set up in July 2013. This is a safe and secure environment for companies and organisations to access real consumer data volunteered by up to 1000 people. The aim of the Lab is to allow these organisations to develop applications, processes and products to empower consumers and discover how to use the new consumer data that is becoming available to them. Among the participants in the Lab are Telefonica, moneysupermarket, which?, Aimia (nectar) and the Institute of Risk Management.
Sopra Steria’s involvement
Sopra Steria has been closely observing the evolution of the midata initiative through contacts from within the Department for Business, Innovation & Skills, as well as with the companies shaping the initiative. Sopra Steria recognises the transformative effect it will have on the UK marketplace and is keen to make sure its clients understand the impact on their markets and businesses.
Rather than being just another level of compliance to adhere to, midata presents opportunities for positive business change with tangible benefits. It will also present risks for those who do not adjust their operations to compete within the evolving consumer-empowered marketplace.
midata - the background
midata has evolved from a number of areas of government policy, old and new, as well as a realisation that Britain, as a largely service-based economy, must be at the forefront of digital innovation in the 21st century.
Current data protection legislation contains provisions for consumers to request all the data related to them from an organisation. However this legislation was designed for the pre-internet age, when personal data was held by just a handful of larger organisations. This carries a cost of up to £50 to request such data, at a time when consumers may switch suppliers every year. Stewarding your own digital life carries a heavy price burden. midata gives consumers the ability to be a data steward, to take responsibility for their digital profiles and manage their own data. midata also requires this data to include transactional data, not just name, address etc, giving consumers the ability to manage more of their lives digitally.
However, midata is certainly not just solving the current inadequacies in the data legislation. It has been developed in tandem with consumer groups and leading household name businesses. The programme aims to develop a personal digital marketplace within the UK, placing the consumer at the heart of business processes. The data that consumers receive back is theirs; they have proprietary ownership of it and can pass it on to whomever they see fit. This means organisations that design services and adjust systems accordingly can take advantage of this new data source and this new marketplace. Indeed the worth of this new personal data market has been placed at £20bn by 2020 in the UK alone (CTRL:shift, The new Personal Communication model: The rise of Volunteered Personal Information).
The UK Government is not alone in pushing the consumer centric digital marketplace; the United States has had its Green & Blue button programme running for some time (recently renamed “mydata”). A French programme “mes infos” is also currently underway.
The personal data marketplace
The personal data marketplace that midata is creating is complex. Yet despite this complexity, midata is built around a very simple idea: consumer empowerment and data centricity. A growing service to enable this is the personal data store (PDS). A PDS is an online service that allows consumers to aggregate their information in one place and to disseminate this back to providers if they wish to. Providers can then use this data to create bespoke offerings, reduce risks and have higher value relationships with customers. Consumers will also have the ability to use third party comparison sites, as they do now, however the integration with PDSs will enable speedier and more accurate quotes for services.
The digital relationships between provider and consumer will be utterly transformed by midata and the new market. Online and automated processes are consistently cheaper to administer than manual or personal interaction, while the errors made during data entry are also greatly reduced. Currently, most customer databases suffer high levels of inaccuracy. According to the Office of National Statistics, the average database degrades in accuracy by 14% a year. In addition, an average of 11% of the database will be incorrect in some way: incorrectly entered or matched for example.
midata helps tackle this problem by making it easy for customers to see basic data (such as address and contact details) held about them by companies, and to correct it if necessary. If the company has engaged with a customer’s PDS then the centricity around the customer enabled by the PDS will also have master data benefits. Each customer will maintain their data and disseminate this to all providers simultaneously in one easy click.
Rather than just being a store for data, PDSs such as Mydex also offer online digital authentication. These services allow online document authentication, removing the need for paper statements, passports etc. to be authenticated numerous times by many people. This again leads to lower cost overheads for providers, who will be enabled to conduct more business processes in the digital space and authenticated personal data updates can be automated.
midata in action
Some leading companies are now pushing forward on midata initiatives for their customers. These companies have recognised that although basic compliance is and will be necessary, they can be seen to have acknowledged early the potential business advantage of embracing the principles of midata by returning data to customers in a useful way.
midata in action – Lloyds Money Manager Case Study
The Lloyds Money Manager is a free, easy way for consumers to keep track of their money. Lloyds has enabled access to personal current and credit card accounts with Money Manager. The free internet banking service can be used to perform a number of activities, such as helping consumers use their transaction data from their accounts to organise spending into categories. These categories might include groceries, entertainment, travel and other household expenses. Customers can use the resulting data to produce easy to read graphs allowing them to see where and when money is spent. This is an example of refactoring and reusing available data to allow customers to take corrective action, such as setting up savings goals and spending plans appropriate to the outputs of their data.
Business Drivers & Key Lessons Learned
Lloyds Money Manager is an excellent example of the following midata principles:
- Use of volunteered data to enable greater customer service
- Improved perception of the company as offering consumer data services that ‘help’ rather than just focusing on selling services.
midata in action – Tesco My Usuals – Case Study
Tesco has recently deployed a new piece of functionality called My Usuals on its main tesco.com website. This tool allows customers to choose and select 50 items they buy most often in as few as two clicks. It is an excellent example of simple and effective use of personal data that is shared with the permission of the customer and utilised by Tesco to deliver a real customer benefit and improved regularity of purchase.
Business Drivers & Key Lessons Learned
Tesco’s My Usuals is an excellent example of the following midata principles:
- Individuals using their own customer information to gain an insight into their own behaviour
- Enabling customers to make more informed choices and better decisions so that they manage their affairs more efficiently
- Allowing customers to obtain the products and services that best meet their needs.
The principles of midata give consumers proprietary ownership of transaction and consumption data from current and past providers. midata confirms the principle that this is their data and therefore can be obtained under current data protection legislation. Consumers will be able to give their data to new suppliers/3rd parties to enable these providers to offer bespoke tailored plans/tariffs/products that will offer the consumer the best possible deal. As the midata briefing pack states:
“A new environment is emerging where individuals can control and manage their own information and act as the natural point of integration of information about their own lives. By combining data from many different sources, and enabling consumers to add information of their own, rich, new ‘person-centric’ data assets are being created.”
Department for Business Innovation and Skills, midata Companies Briefing Pack 2012, p23
“Firms that move early will be positioned to benefit because they will have the opportunity to shape data standards.. The rise of Choice Engines will do more than create super shoppers. It will make markets more efficient, create new businesses, and improve the way governments serve their citizens. Big stuff”.
Thaler, R H & Tucker, W (2013), Smarter Information, Smarter Consumers: Harvard Business Review January-February 2013, p54
Our partners’ perspective
Sopra Steria partners with best-in-class companies to help deliver relevant products and services designed to help our clients realise the potential in developing their strategies on midata. Here is what some of our partners have to say on the opportunity.
“The midata initiative places the consumer back where it belongs: at the core of the governance strategy for their personal data. There is both a compliance requirement and a business opportunity and the winners will be those who can best combine technology and processes to reflect the consumers perspective and needs, from outside in.“
Yves de Montcheuil VP of Marketing – Talend
midata – The enterprise opportunity
Companies will be able to analyse customer historical data to tailor offers to individual customers more accurately. This will enhance the chances of acquiring new business and improve retention, customer and risk management. midata acts as a spur to higher value customer relationships by promoting the following activities and opportunities:
- Use data to offer consistent customer experience and engagement
- Meet regulatory standards
- Gain new business through the use of an applicant’s midata from their time with another provider/using other provider products.
- Use volunteered data to enable greater customer service penetration (banking and credit cards)
- Provide the catalyst to “Branch in the cloud” banking due to the increased customer/bank data exchange being more akin to face-to-face branch interactions
- Improved perception of the companies offering consumer data services
- Increased data exchange enables risk reduction and higher value customer relationships
- Enable customer targeting, for example customers who live using credit, but always pay
- Manage and reduce risk by analysing consumers’ historical data prior to the offer of service terms
- Third parties can mix midata with other data sources to create rich consumer-centric data sources.
Why act now? – Example customer personas
The UK Department of Business, Innovation & Skills is already working with companies to show the potential of the midata initiative in terms of developing an extraordinary level of industry cooperation and the development of standards to deliver real customer-centric benefits to consumers.
We feel the real value of the scheme is in its ability to empower companies to develop their own standards, thereby driving the development of standards throughout industry. Through its work with leading businesses and consumer groups such as Google, British Gas, Lloyds and O2, the Department of Business, Innovation & Skills is actively encouraging private sector businesses to release consumer data to customers electronically through the development of applications (apps) and services. These will help consumers make effective use of their own data.
By ensuring consumers can access transaction/consumption data in electronically readable formats, businesses are demonstrating their transparent nature and their goodwill in supporting consumers in their search for best deals. This undoubtedly encourages consumer buy-in, loyalty and trust.
We hope the following Customer Pen Portraits illustrate some of the possibilities for your business:
Customer Pen Portrait - The utilities customer
John Smith is a customer of a large energy firm that has provided him with a smart meter. The energy firm is involved in the “midata” initiative and regularly provides Mr Smith with the smart meter information, billing, and all his other personal information in a standard easily read electronic format. As his provider has just raised its energy prices, Mr Smith has decided to switch. He has uploaded his midata to a leading price comparison website where it has been instantly analysed. Mr Smith has been offered bespoke tariffs based on his usage by a number of other providers.
Customer Pen Portrait - A change in personal circumstances
Louise has just got her first job after university; she’s very excited and nervous at the prospect. She is going to be working with children and, quite rightly, her new employer needs a lot of documentation from her. Before midata and the rise of the personal data store (PDS) this would have been a laborious task for Louise: hunting around the house for paper bills within 3 months of date, not easy in the time of paperless billing; digging out her university grades and qualifications; not to mention her Criminal Record Bureau (CRB) check.
Once she finds all this paperwork Louise then has to visit the Post Office and pay out for expensive guaranteed Special Deliveries. That’s all ended with midata. Now all Louise has to do is simply log into her PDS and send her verified documents electronically, in less than a minute. Her employer is pleased too. On receipt of her message, the employer’s system checked the documentation automatically and a once laborious, expensive checking process is completed in no time at all, at very low cost.
Customer Pen Portrait - A change in personal circumstances
Faye is getting married in 6 months and has joined the leading online dieting club to try and lose some weight before the big day. Within the sign-up was a feature to allow the club to monitor her grocery shopping through midata. The club analyses her shopping and suggests healthy weight-busting recipes using what she has bought. It gives her the exact nutritional information of her purchases via a connection to a Global Data Synchronisation Network (GDSN) data pool, even taking on board the own-branded items. On top of this the club also monitors her day-to-day restaurant and drinks purchases via the midata, which again interfaces with the GDSN data pool, giving the exact ingredients and calories she has consumed.
Future regulation and scope of midata
The midata initiative is voluntary and will remain so as long as the Government is satisfied that the relevant sectors are embracing it. Primary legislation was put forward as part of the Enterprise & Regulatory Reform bill which passed in May 2013. The legislation gives the Information Commissioner, or an agent thereof, the power to legally enforce the initiative if the voluntary agreement does not produce the desired results.
As we have previously stated, the midata initiative initially covers companies in three main regulatory sectors: retail banking (accounts and credit cards), energy and mobile telecoms. However, it may increase in scope to others, with an aspiration to include other data hungry sectors (e.g. retail).
With reports such as The new Personal Communication model: The rise of Volunteered Personal Information estimating the size of the UK market for personal information at £20bn by 2020, it is clear that embracing the principles of midata can benefit every company that holds personal data. More importantly, midata also greatly benefits their customers in the long term. All of this is, of course, predicated on a continuing spirit of cooperation and the mutual development of benefits.
Why should my company be engaging with Sopra Steria?
Sopra Steria is ahead of the game when it comes to helping businesses understand, comply with and thrive under the midata initiative.
Sopra Steria delivers IT enabled business services and is the trusted transformation partner for private and public sectors organisations across the globe. By combining in depth understanding of our clients’ businesses with expertise in IT and business process outsourcing, we take on our clients’ challenges and develop innovative solutions to address them efficiently and profitably. Through our highly collaborative consulting style, we work with our clients to transform their business, enabling them to focus on what they do best.
The Sopra Steria midata Readiness Toolkit (mRT)
Get ready for midata with Sopra Steria’s midata Readiness Toolkit (mRT). This is the starting point for your organisation’s push into the new market created by the paradigm shift in consumer empowerment brought about by midata.
As midata has now passed through the primary legislation phase it is time for businesses to plan for the coming changes and challenges that lie ahead. The midata Readiness Toolkit (mRT) has been specifically designed with that in mind.
We can help your business understand midata, the effect it is having on your markets and how it will impact your systems and business processes, now and in the short, medium and longer term.
Our mRT engagement involves:
- A questionnaire to enable us to tailor the workshop to your business needs
- mRT Introductory Workshop
- Specific Line of Business Workshops Engagement (IT, Marketing, CRM)
- midata Readiness Report
Description of the midata inititative timeline
(Back to What companies are already involved with midata Initiatives?)
- 22 August 2011 Original Consumer Empowerment Consultation from HMG
- 11 August 2012 midata Public Consultation Launch
- 1 November 2012 HMG announces that following the consultation laws will be enacted to make divulgence of personal data in an e format on request compulsory
- 28 April 2013 Enterprise & Regulatory Reform Act 2013 (midata included within) passes into law