Amsterdam: Finextra is covering Money 20/20 Europe, sharing insights from key sessions at the conference.
During a panel discussion on the vital issue of earning consumer trust and consent, Sanjib Kalita, CEO of Guppy and editor-in-chief of Money 2020, prompted attendees to reflect on the essential components of building consumer trust.
Elena Alfaro, global head of data and advanced analytics at BBVA, emphasized that gaining trust hinges on two critical factors:
1. Respecting personal data and transparently demonstrating how it’s utilized.
2. Creating meaningful and valuable services based on that data.
She pointed out, “The problem is that consent and trust don’t always align… We need to integrate these two aspects to function effectively.”
Shail Deep, SVP and chief product officer at TransUnion, identified three foundational elements required to establish trust: transparency, consumer control, and data security assurance. He highlighted that while trust and consent are distinct concepts, trust must be established first.
Focusing on the consumer’s perspective, Joris Lange, CEO of Datakeeper, noted an increasing consumer awareness of privacy and data security risks. Deep added that as consumers gain awareness and choice, a balance must be maintained between trust, control, and data security.
“When trust is in place, consumers can evaluate whether the benefits of a service justify the data they share,” he said, noting generational differences in attitudes toward data sharing.
Alfaro underscored the importance of distinguishing between privacy as a regulatory issue and value as a perceptual one. Deep echoed this by emphasizing the necessity for consumers to understand the benefits they gain from sharing financial information.
“Open banking exemplifies how consumers can leverage their financial data for favorable outcomes, such as streamlined processes for loans or credit cards,” he explained, stressing the importance of consumer protection.
Alfaro pointed out that data permission is especially crucial in financial services due to the nature of handling individuals’ finances. “If we fail to manage this right, trust will erode, jeopardizing all future services dependent on data.”
Both panelists agreed that communicating the value proposition is key to gaining consumer participation. Deep mentioned that some organizations prioritize short-term gains over deepening consumer relationships. He cited Netflix as a model for utilizing data to inform production decisions, thereby enhancing customer loyalty.
“We’re seeing a similar shift in financial services, where companies invest in data insights to help consumers improve their financial health, fostering a more secure relationship rather than merely cross-selling products,” Deep elaborated.
Alfaro called for financial services to learn from current practices and shift their approach to data. She argued against the prevailing model of offering free services in exchange for data without transparency. “Businesses should be more straightforward about data usage and the value consumers receive.”
In concluding the discussion, Kalita posed a hypothetical question about what changes could enhance the data ecosystem over the past two decades. Deep’s response included three key points:
1. Eliminate data silos that hinder organizational progress and data integrity.
2. Make platforms more interoperable to facilitate data integration.
3. Achieve the ultimate goal of merging structured and unstructured data.
Alfaro reflected that it might have been wiser not to offer free services for data, and to prevent data from becoming concentrated in the hands of a few tech giants. However, she emphasized the importance of focusing on future improvements.