We want to keep our data private, and we want more control over how and when it’s used, but we also wish for more personalized and contextual service offerings from businesses. According to Twilio’s new State of Personalization Report 2022, 62% of consumers expect brand personalization, yet only 40% trust brands to use their data responsibly and securely.
The discrepancy places customers and businesses in a retention pattern, and brand trust is at the heart of the dilemma. If customers can’t fully trust companies with our data, how can we expect them to provide us with a better customer experience?
The first step in solving this problem is to give consumers the ability to take back control of their data in the simplest, most frictionless way. At a high level, the government’s Consumer Data Law Service (CDR) aims to achieve this.
The CDR promises to give Australians more choice and control over how their data is shared within the system. It can only be transferred to companies accredited to access the service. Under CDR, you can request your data from an organization that currently owns it and provide it to another company that may aggregate and deliver value-added services. For example, you can get your information from your bank and share it with a third-party provider like Frollo to access budgeting and personal financial management solutions.
The CDR ecosystem has already opened the door to the Open Banking regime, from which we will see many practical use cases emerge in the coming years, especially as we add insurance and pension data to the mix in what is being labeled as Open Finance.
These ‘open’ ecosystems are particularly beneficial to key community subgroups, such as Australians with insufficient banks who lack a financial data footprint or insight and deprive themselves of financial services that can improve their living outcomes in a financially sound manner. Using the CDR, banks and financial institutions can use alternative data to support consumers with optimal results.
However, taking control of your data alone in this way does not solve the problem of privacy and trust. Regardless of its need, the third party still has full visibility of all your data, which raises a range of concerns among savvy and trust-based consumers.
This is where Self-Sovereign Identity (SSI) comes in. The SSI system turns data privacy on its head and gives consumers control over what is shared. A digital version of your wallet will be created in which you can store all the credentials, be it your driver’s license, passport, or even education certificate.
However, this should not be confused with a digital ID. The main difference is that SSI is the collection of personally identifiable data attributes of that physical or digital identifier, which is validated in real-time through a secret digital authentication key issued by an issuing authority, such as a government agency.
The most obvious use case for SSI is to think about going to a bottle store: if the cashier asks to see your ID, physical or digital, they’ll get access to your actual date of birth plus full name and address, when in reality they only require proof that you are actually over the legal age.
Over time, this can lead to data misuse by suppliers and their employees who are not accredited to access such information.
While CDR and SSI have evolved quite separately, SSI builds on the principles of the CDR in that it provides an arc that bridges an overall approach to data access to consumers who decide how much of those data verifiers need to see to product or service.
It is made possible by emerging data treatments such as Zero-Knowledge Proof (ZKP) and Decentralized Identifiers (DID). Under ZKP, you can prove something about your identity without explicitly saying what it is, for example, your age or income. With DID, you do not have to store that proof with a specific organization.
Sounds far-fetched? Not really. In reality, many organizations already offer products based on SSI, such as ConnectID from Australian Payments (formerly EFTPOS). However, one of the most complete and available on the market is Datakeeper.
Datakeeper is based on SSI principles and is a new digital wallet built by Rabobank. It is a great example of a universal digital wallet application that enables identification, data sharing, and electronic signature in a safe, fast, and secure process.
Through Datakeeper, consumers can provide suppliers with validated data, such as age and income, stored securely and decentrally on the user’s mobile device and nowhere else.
This essentially allows consumers to rent a car or apply for a mortgage, all in the palm of their hand, eliminating the need to carry extra documents.
By empowering consumers to manage their data in their hands, companies can restore the trust economy by emphasizing the value they provide in exchange for precious consumer data. In today’s business epicenter, without confidence, observant consumers will continue to hold their data cards close to their chests to maintain what little control they have left.
CDR is a great initiative in principle, but as we see innovations like SSI emerge simultaneously, they are probably on the way to convergence. SSI takes precedence as it provides the ability to ensure broad adoption across all industries and build on the CDR to support several other vertical markets, such as retail, aviation, and more, creating a seamless digital ecosystem for all businesses. Most importantly yet, consumers to take advantage of this.
With digital wallets backed by SSI principles, consumers can share what they want to share. Understandably, those who share more will receive personalized, value-added experiences in return for their trust.
