Data-sharing in financial services: The next generation has been saved
Data-sharing in financial services: The next generation
Unlocking new value by using privacy enhancing techniques
Techniques that reduce or even eliminate the privacy risks of sharing data.
Often, the value of data is greater than the sum of its parts. Specifically in the financial services sector, the usage of data allows many financial institutions to offer greater value and personalized services to clients as well as address business challenges such as fraud. The usage of data raises privacy and security concerns from institutions, regulators, and customers – these obligations have previously prevented institutions from unlocking the full value of their data.
Data-sharing in the Netherlands
Within the Netherlands we see a similar trend: all banks, insurers, pension funds, and investment managers are embracing data as the new oil. They are installing Chief Data Officers (CDO’s), which are developing data strategies, as well as setting up teams and infrastructure for data so that projects can get more value out of data. Designing new business models, innovations ecosystems and platforms with data at its core has become a priority. Envisaged are benefits for customers, financial institutions and regulators of using and sharing data, although conditions and policies are applicable. With recent scandals like Cambridge Analytica and the skewed view of customers towards financial institutions, we see them more and more struggling between the ambition to get more value out of data (sharing), actually executing the data plans and obtain all the required approvals from customers, regulators and internal stakeholders as legal and compliance. Often leading to a dissolution in the usage of data and sharing with external business partners. But there is good news!
Privacy Enhancing Techniques
Now, emerging privacy enhancing techniques (PETs) have the potential to fundamentally alter these dynamics by reducing or eliminating the privacy risks of sharing data and opening the opportunities to create value.
The World Economic Forum and Deloitte's latest report discusses five Privacy Enhancing Techniques that allow institutions, regulators, and customers to analyze and share insights from data without distributing the underlying data itself. These PETs are:
Differential privacy, where noise is added to an analytical system which makes it impossible to reverse-engineer the individual inputs
Federated analysis, where parties can share insights from their analysis without sharing the data itself
Homomorphic encryption, where data is encrypted before sharing, such that it can still be analyzed but not decoded into the original information
Zero-knowledge proofs, where users can verify their knowledge of a value without revealing the value itself
Secure multiparty computation, where data analysis is spread across multiple parties such that it is impossible for an individual party to see the complete set of inputs
The report outlines every technique and how it works at a high level and illustrates, through hypothetical cases, how PETs can break the privacy/utility trade-off in financial institutions. Ultimately, the report makes the case that PETs can redefine the dynamics of data-sharing, allowing institutions to create value while addressing their most pressing problems in a way that is acceptable to customers, regulators, and society at large.
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Read the full report to determine how these Privacy Enhancing Techniques can help you unlock the full potential of your organizational data while protecting it.