The UK’s existing data protection law gives individuals the “right to data portability” – the right to obtain and reuse their personal data for their own purposes across different services.
But in practice, this right is often difficult or impractical for consumers to exercise. Most consumer data is currently locked away and only accessible directly by the consumer or the original data holder (for example, the consumer’s bank).
Smart Data makes the right to data portability a reality, in order to benefit consumers and unlock innovation. It enables individual consumers and small businesses to access and share their data simply and securely with trusted, authorised third parties who can offer innovative services to them. For example to help save them time and money, or find the services most suitable for their needs.
The essential building blocks for Smart Data are as follows:
| Building block: | Example (from Open Banking): |
| 1. A business (the “data holder”) holds data about a customer (an individual or small business). This might be data the customer has given the business (e.g. personal information), or data generated through the customer’s interactions with that business. | A bank holds its customers’ current account transaction data. |
| 2. At the customer’s request, the data holder shares the customer data securely with a third party. | The customer logs into a third party’s app, and authorises that app to access their current account transaction data.
The bank, once it has confirmed that the customer has authorised it to do so, shares the customer’s current account transaction data with the third party. |
| 3. The third party provides some useful service to the customer, using the customer’s data. | The app suggests opportunities for money saving to the customer, based on their transaction behaviour. |
Of course, there are many decisions to be made about how these building blocks might work in any given sector. For example:
use Open Banking as of February 2023.
now estimated to be active users of at least one open banking service.
A Smart Data scheme is the set of rules governing how Smart Data works in a particular sector, providing answers to these (and many other) questions.
Open Banking is the active example of a regime that is comparable to Smart Data scheme in the UK, covering bank current account and credit card data. As of November 2024, over 11 million consumers and small businesses are benefiting from services that use Open Banking.
But Open Banking is just the start. The government has sought powers to extend its ability to introduce Smart Data schemes via the Data (Access and Use) Bill. This would enable Ministers to introduce interoperable Smart Data schemes across sectors, ultimately establishing a Smart Data economy.
New Smart Data schemes will enable innovation by giving consumers real control over their data, creating opportunities for innovators to offer creative new services that use this data for the consumer’s benefit.
