👩💻 Government Wants to Sell Our Data?
So far, our data was being leveraged by private companies for their personal benefits. But now the government also wants in on this data play (Reading time: 3 mins)
Data is the new oil.
The more digital our existence gets, the more our reliance on data increases.
Most companies have already realised this. This is why tech firms across the world are hoarding your data, so they can better understand you, and better sell to you.
Now, governments are also catching on and entering the data game.
And that includes the Indian government.
What steps is it taking in the data space? ReadOn!
Step One: Financial Data
Every time we sign up for a new loan or engage a service provider to handle our finances, we have to pull all our information out again and again.
If only there were an automated process for pulling them all together, no?
Enter: The Account Aggregator System.
Account Aggregators are a new class of NBFCs that bring all your financial data under one roof. You just need to give your consent to store your data.
Don't worry, these aggregators won’t have access to your data. They just act as intermediaries who share your data with appropriate users, with your consent.
But what big changes can they create in the ecosystem?
In the traditional loan application process, there are a lot of steps. And at each step, there are large drop-offs.
These aggregators can shorten this journey, improve user experience and increase the “volume” of sales of financial products.
Plus, they can help better assess the credibility of a loan-seeker by giving a complete picture of their finances. This can benefit MSMEs, who currently face a massive loan gap of $380 billion, despite contributing 29.7% of our GDP.
Does this mean that the Account Aggregator system will make fintech payment companies that are sitting on hoards of our data, redundant?
They will still have unique insights on how users are interacting with their platforms which can give them an edge over others.
And while we were still pondering upon this, the government published a draft paper that could disrupt the tech industry as we know it.
Step 2: One Database to Rule them All?
The government has always been one of the largest repositories of public data. And in the last few years, this repository has grown thanks to the introduction of Aadhar Card, GST rules and so on. What if it could use this data to make a few bucks?
You see, right now the system is kind of rigged. If you're a big company, with lots of customers, you have a massive amount of data and customer insights.
On the other hand, a company that is starting out has to work long and hard to gain the same insights.
The government wants to solve this by selling its data to these companies.
That's the plan it has proposed in a new draft paper, now open for public comments.
This could be a game-changer for us.
First, this will become a major revenue source for the government.
Second, it could help end the monopoly of foreign tech companies like Amazon and Meta in India, by helping Indian firms compete with them on an equal footing.
But, there are drawbacks to this plan as well.
For starters, this could prompt the government to collect more and more data. Right now, it records only the bare-minimum data that is absolutely necessary. But if it's gaining money from our data, what's to stop it from collecting all our personal data. This data could then also be used for targeting those that don't support the incumbent government.
Plus, as this data is up for sale, large companies will still have an upper hand. For instance, Reliance can afford to buy a lot more data than other companies and further establish itself as a monopoly.
However, this idea is still being discussed and our input could add safeguards to this measure so that it benefits all and harms none.
Let us know what you think about the government's data-related policies. Will they make life better for all of us or is this a slippery slope towards government control?
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