If you have got a spare five minutes, could you write down exactly what you plan to buy this year, how much you are willing to pay for it, where you intend to get the money from, and which brands you do (or do not) want to hear from about those products and services? It seems unlikely that you will get very far down that list before deciding you have better things to do.
Yet this is a direction of travel for data, driven by the open data movement (backed by the midata legislation) and a growing number of digital data exchanges. The question has to be whether consumers possess the skills, willingness and tolerance to undertake what seems likely to be asked of them.
One press release to hit my desk this week suggests many are not. Research carried out on behalf of Noddle, the free for life credit report service, by fast.Map found that 55% of consumers have never accessed their credit report. Among the 45% that had, only four% do so weekly and eight% once a month.To the founder of the service Tom Ilube, this was “surprising”.
Note to Tom - as one of the 55% who have never checked my credit report, it is not because I lack control over my financial future or am missing out on good financial deals. It is because I already know what position I am in (terrible, since you ask) and how lenders are likely to view me. That information can be easily deduced from the APRs being applied by the credit card issuers I use and by the amount of money left in my bank account at the end of the month, rather than by using the tools those lenders use to decide on those rates.
It is also not that surprising that in a down economy where lending is sluggish, consumers feel no great urgency about understanding what those with the money think about those who lack it. Like a game of battleships, a credit report will show you how many strikes you have against you and how close to sinking you are. That is only valuable if you are in a position to make choices and change that profile. For the vast majority of the working population, with wages falling behind inflation and a constrained housing market, those options are very limited. Hence the lack of interest in finding out more.
There is also an implicit assumption that consumers should make use of these tools and actively access the information held on them. That is what lies behind the Government’s assumptions about midata, after all - discover how much energy you really consume and you will use that data to find a cheaper supplier. The same logic applies to bank accounts, a product where switching has been promoted for a decade and yet remains sluggish.
For some consumers, this will be appealling. But they are likely to be in the upper income deciles already and to possess the skills necessary to process their personal information and make informed choices. For many consumers, this will always be a challenge, either through a lack of the numerical or logic skills required or because they simply do not have the financial basis on which to drive a negotiation.
What this means for digital information exchanges is an uncertain future. The concept has been promoted for a long time - I first came across it in the book “Information Masters” published in 1999. A number of these exchanges have since sprung up, such as iAllow and Handshake. What such propositions tend to struggle with is reaching the critical mass that turns them into a commercial success.
For that to happen, consumers will need to be up-skilled or the process greatly dumbed-down. Until you can manage personal information with one thumb via an app, the age of mass data empowerment seems unlikely to arrive.