Data and infrastructure: the two keys to boosting the digital economy*

Álvaro García Porras, Public Policy and Regulatory Affairs, Banco Santander, and María Dolores Ramos Martínez, director of digital regulation and business of Banco Santander

Today we can pay with our smartphone, we can open an account through our tablet or receive financial advice by videoconference. We can also do this at our bank branch, if we prefer. We have this choice because technology provides the means, but also because the rules have allowed these services while keeping them safe for us.

But the road does not stop here. There are still very important steps that could make finance more accessible for everyone and at better conditions.  To achieve this, the rules must still be adapted so that we can benefit from technologies such as blockchain, biometrics or artificial intelligence.

The European Commission presented its Digital Finance strategy at the end of September, with a clear vision on the need to facilitate the adoption of these technologies while ensuring their potential risks are contained. 

But there are still more profound changes to be done so that the core elements that enable digitalization are put at the service of users and the economy. Those are data and infrastructures.

We have all learned that data is extremely important in this digital world. And we ourselves generate much of this data. When we buy on a platform, when we search in a browser, when we interact on a social network, we are also communicating something about ourselves: what we need, our interests, who we are. This information allows companies to offer better services: if we tell our fishmonger that we are throwing a special dinner, he can give us advice on his best fish, how many guests it can serve, he can prepare it for us to cook better or he can even give us a recipe.

 However, it is up to us to choose who we tell about that dinner. That fish may pair very well with a wine, but I don't want the fishmonger to tell the wine merchant, the baker or the florist about that dinner. What I want is to be able to share this information only with whom I want to share it, and only if I decide to share it. 

We understand this very well in the physical world. It should be the same in the digital one. In a digital environment, a user should be able to transmit easily and safely -  with whoever he decides and when he wants -  the information that he deems appropriate. And not only physical persons should have this right, but also companies, including SMEs, which also generate data and can access better services if they can share this data with suppliers, authorities or partners.

This is not science fiction. It already happens in banking. Banks are allow us to aggregate our accounts by sharing this data with third parties and permit other service providers, who are not our usual bank, to see the full picture of our financial situation.  This allows bank customers to have access to new and more competitive propositions from the ecosystem.

This opportunity should cover other sectors. Having an open data economy does not entail a risk for data protection, but rather the greatest empowerment that can be given to citizens by giving him the control of the data they generate.

Another key element for digitalization is the infrastructure that support digital ecosystems. We can develop a wonderful app, but if we can not upload it to an appstore, no one will be able to use it. We may be used to paying by smartphone, but if we change our device, we may have to stop doing so if the manufacturer of the new handset does not allow my bank to communicate with me through it, or if that new manufacturer imposes unacceptable conditions. I can’t buy the products that I am interested in, but only those ones that the owner of a given platform decides to show me.

As a company, to reach users digitally, it is now necessary to use digital infrastructures. These infrastructures, in some cases, are owned by companies that may be competitors at the same time, offering the same products or services. In practice, they can leverage on their position as the owners of infrastructure to favor their products in rankings or benefit from more favorable conditions.

These platforms have created ecosystems that work very well and explain their success. However, as they grow in size, their responsibility should also increase, since the failure of their ecosystem would be very harmful for the consumers and companies that depend on them to reach the market and survive.

The European Commission is also looking at this challenge, including proposals for open data in finance under the control of the user and opening technical infrastructures such as NFC antennas, which support mobile payments.

Much remains to be done. The urgent need for Europe to recover from Covid requires that the authorities be ambitious. Especially when it comes to data and access to infrastructures, they should not stop at initiatives that only affect the financial sector. Citizens engage with different kind of providers in their day-by-day lives and they deserve a cross-sectorial vision of the data and strong rules of access to necessary infrastructures.

*This article was published last October 8th in the Digital Economy section of the Spanish newspaper Expansión

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