Page 20 - FIGI - Use of telecommunications data for digital financial inclusion

6 ENABLING DATA TO BE USED TO ITS POTENTIAL

6�1 Limitations and incentives subject to such obligations may be defined vaguely
Traditionally, telecommunications operators collect- or precisely but would typically cover much of the
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ed and maintained data necessary to fulfil billing kind of data that would be useful for DFS.
and network management functions necessary for In some cases, such data may be disclosed to oth-
their core business of providing telecommunications er parties where the customer has provided consent
services. Today, the costs of collecting and maintain- to do so. However, this relies on establishing a pro-
ing data have decreased and the potential value of cess that informs the customer with sufficient detail
monetizing telecommunications data at scale has and accuracy what the data will be used for and
increased, creating incentives to use the data creat- some form of unambiguous affirmative agreement
ed by telecommunications services. to use of the data. The combination of cost, time and
Furthermore, operators can design applications uncertainty impedes the easy gathering of such data.
and services specifically designed to facilitate collec- Furthermore, while consent is often a lawful basis
tion of information beyond the purpose of improving for processing of personal data under many data
delivery of telecommunications services. This poten- protection laws, it has not yet been clearly intro-
tial will only expand with proliferation of machine-to- duced in many countries’ telecommunications laws,
machine communications (M2M). Collection of data regulations and licences as an exception to opera-
may be used to reduce the price of traditional con- tors’ confidentiality obligations under the telecom-
nectivity services, as consumers can ‘pay’ a portion munications regulatory framework.
of the cost of their service by providing valuable data Where there is not a clear and firm legal basis for
that the operator can monetize in other ways. a telecommunications operator to provide third par-
There are thus increasing profitable opportuni- ties access to telecommunications data, the incen-
ties and so incentives grow to collect, maintain and tives may not be strong enough for them to take the
analyse greater quantities of data. Nevertheless, for regulatory risk of doing so. In particular, the revenues
a combination of reasons, many telecommunications that a telecommunications operator can generate
operators are still not using customer data or making from the data may still be only a fraction of the core
it available to third parties to the extent of its poten- business of telecommunications services. This leaves
tial. those within the organization arguing to exploit the
data with a voice that may not be heard amidst the
6.1.1 Declining relative value of challenges of managing a telecommunications oper-
telecommunications data ation.
The rising penetration of smartphones, use of mobile
data services and mobile apps is creating a vast 6.1.3 New regulatory models
amount of personal data that offers insights into Some new regulatory models are emerging that may
individual behaviour that far exceeds that offered by undermine the immediate value to telecomunications
telecommunications data described in section 3. DFS operators of sharing their data. For example, India
providers such as Tala, Branch, Neon, Julo, Grab, has introduced a regulated service provider concept
Alipay and Konfio are able to use this data powerful- of account aggregators. These are licensed entities
ly for DFS. The competitive advantage of that data, that obtain the customers’ consent to access data
the increasing prevalence of data-only 4G and 5G about them from various sources. The policy ratio-
networks and the declining role of voice services, nale is to ensure that data will be put to economically
means that the relative value of telecommunications productive use for the benefit of data subjects while
data diminishes against the competitive advantage preserving individuals’ control of data about them.
of app usage data. The incentives to use it, then, are Where entities hold data about individuals, a regula-
lower than might otherwise have been the case. tory requirement to make that available to other enti-
ties could undermine the ability of the former to use
6.1.2 Risk-averse approaches to regulation the data in a manner that gives them an advantage.
To begin with, most telecommunications operators Telecommunications data may thus become treat-
are subject to confidentiality laws, regulations and ed as a social good rather than a private good. The
licence provisions restricting sharing of data relat- incentives to generate value may shift from telecom-
ing to their customers. The customer data that is munications operators holding the data to others

18 Use of telecommunications data for digital financial inclusion