Data is the most valuable resource in today’s world and commonly referred to as the new oil. There has been a shift towards making data available for sharing in a lot of verticals in recent times as we are moving towards a globally connected world. Businesses have started collaborating to provide better products & services to customers. So clearly, data sharing is crucial to trigger innovation and open up novel use cases in myriad ways. Interesting to note that many regulators are keen on the core public interest and believe that data sharing will create a fairer economy and benefit society as a whole**.

Banking has also picked up the pace with this trend, and we are seeing several initiatives emerging globally in the open banking space. However, there are a few challenges around technology & reluctance to share data prevailing among banks. Lack of data standardization, real-time data availability, and integration of data silos are some of the technical challenges, which are trying to be addressed by many innovative solutions. Blockchain is one such technology that can address these challenges (Refer to old paper to know more). But the reluctance to share data remains unaddressed in many of the solutions. Unless the banks are incentivized to share data, reluctance will not fade away. The incentive is an integral part of any economic transaction as it drives the motivation of a participant to perform something.

Is trust also an important aspect when it comes to data sharing? Let’s see.

Trust is the cornerstone of customer relationships businesses, given the later are handling enormous amounts of customer-sensitive data. Customers trust that these business entities would manage their data securely. So, it boils down to trust, which is the core principle that glues all the participants together in an ecosystem and motivates them to participate actively. Blockchain networks are ecosystem-driven and typically collaborative in nature where nobody controls rather, everybody contributes to the network. The data stored on the blockchain is immutable & secure in nature, which inherently creates the element of trust. Incentives models built on blockchain technology would accelerate data sharing in many domains such as health care, banking & financial services, government records, academic research etc. Out of these domains, Banking & financial services is the one that is still clinging to traditional business models. It’s high time banks adopt these new business model innovations to stay relevant in the digital era and, most importantly, create more value for their customers by offering them innovative products & services. At the same time, it is very critical to consider the data privacy aspect while designing such technology solutions. Customer consent needs to be captured whenever data is shared, and blockchain provides an immutable audit trial to verify & validate the captured customer consents.

Finacle Identity Connect is one of Finacle’s blockchain offerings which is designed to create ecosystem(s) where banks can share customer KYC data (with customer consent) among themselves in a network. As it is imperative to develop self-sustaining and innovative business models, Finacle Identity Connect adopts an incentive model that banks can leverage to participate in data sharing actively. Incentivization will open doors to new opportunities for monetizing data & services shared on the network, which can help in boosting the adoption of such initiatives. In such networks, data sharing can lead to new business opportunities to create new products and services, enhancing the customer experience. Such solutions that are ecosystem-driven with innovative models are likely to accelerate business value and innovation for all the participants involved.