Is identity the new money?

We’ve all heard the phrase “If the product is free, then you are the product.” It was coined at a time in the not too distant past when social networks were in their infancy and we were all mesmerized by the fantastic services that we could consume to keep in touch and interact with each other …. all for free!

Little did we realize at the time what the bargain we were getting into actually meant. The vast majority of us had no idea that all our interactions were being recorded and monitored by the social networks who were learning everything there was to possibly learn about us as people, our habits, our likes and dislikes, and in some cases our innermost, private secrets. This information, containing the essence of who each of us is, was then used to target advertising and other services at us, making the companies collecting this information global giants and earning billions of dollars in revenue every year. Personal information is very valuable.

The problem we all have as consumers is that most of us have been unwitting pawns in a giant information game. We want the services for free, but have little concept what the value of the information we are giving back in return equates to. In fact, the European Commission estimates that the value of personal data in the European Union will hit €1 trillion by 2020. Looking at the profits of the giant internet companies begs the question: “Is there a case to be made that the trade is not fair and that we are being taken advantage of because we don’t know what the value of our identity and other information really is?”

The situation as it existed would likely have continued for a long time, as we either didn’t care or were unaware of what was happening or were powerless to do anything about it, had it not been for a principled young man by the name of Edward Snowden. Almost singlehandedly, Snowden has managed to shine a light on the practices of some governments and big business, and has explained what it means for all of us as it relates to our privacy and our personal data. This has opened a lot of peoples’ eyes to what has been happening.

In 2016, it is expected that the European Union will enact a new Data Privacy Directive, encompassing the so-called “Right to be Forgotten”. For the first time, it will be explicitly stated in law that identity and other personal data will belong to the individual. This will give all European citizens the right to control how their identity and maybe more importantly, their personal data, is consumed. It is the beginning of a radical change in the balance of the power in the relationship that we have with the companies that provide us services over the internet. For the first time the consumer will have a voice.

In addition to the consumer being given a voice, this new directive will be backed up by stiff penalties for those companies who fail to comply with it. Between 2% and 5% of their global revenue could be the price an organization will have to pay for failing to comply. Because of this, I expect that the nature of the relationship will change and it will put the consumer at the centre of their personal data universe. It will empower the consumer to make choices as to who, how, when and where their identity is consumed and, very importantly, how they are rewarded for providing the consent for their information to be used.

Judging by how much money is made today from people’s identity and personal data, this will be a big opportunity for consumers.

Full details on all of the Technology Pioneers 2015 can be found here. 

Author: Rob Leslie, Chief Executive Officer, Sedicii, a World Economic Forum’s Technology Pioneer.

Image: A surveillance camera is pictured in front of the headquarters of Vodafone Germany in Duesseldorf September 12, 2013. REUTERS/Ina Fassbender