Data is fundamental to financial services and while in the past few years it has become easier for people to interact with data, further change is on the horizon.
Chris Gorst, director at Challenge Works, says while common data use involves things like mobile banking apps, so-called 'smart data' can be used to automatically share data with third parties.
He explains that it is different to the current data model where a consumer's data sits with the organisation that gathered it.
"Smart data is about enabling us as consumers to access and securely and seamlessly share our data with authorised third parties," he says.
"What smart data says is, 'well actually if we can enable consumers to share their data seamlessly and securely then these authorised third parties can provide useful, innovative services to consumers'. [It's] about opening up that opportunity across different sectors of the economy."
Challenge Works, which is part of UK innovation foundation agency Nesta, has recently launched the Smart Data Discovery Challenge, which is looking for ideas around data across multiple sectors, including financial services, that could benefit people, small businesses and wider society.
Gorst says the issue in the UK is that debt levels are high, at the same time there is a longstanding issue of financial literacy, and people are not saving enough – smart data provides an opportunity to tackle those challenges, he adds, by helping give people a detailed view of their financial situation.
"We all have lots of relationships with different financial services providers, whether that's our bank, savings account providers, mortgage providers, loan providers, [or] insurance companies, but it's very difficult for us to have an overview of what's going on in our financial lives.
"With smart data, that in principle provides the technological infrastructure that enables you to bring together a complete picture of your financial life, and then hopefully to kind of manage your financial life better.
"And because smart data enables these authorised third parties to provide services to you they can help you manage your financial life better."
To hear more about the risk and rewards of smart data in financial services click on the image above.
carmen.reichman@ft.com
