Nine out of ten people say data privacy is important to them, according to a recent Mastercard-commissioned survey, yet only one-quarter say companies are doing a very good job handling individuals’ data.
Mastercard has announced the launch of the Data Responsibility Imperative to advance a dialogue around how organizations can work together to close this gap, inviting others to join them in the effort. The initiative hinges on establishing a core set of principles guiding the ethical collection, management and use of data.
“In today’s fast-paced digital economy, we’re facing never-before-seen circumstances that test our ethics on a daily basis,” said JoAnn Stonier, chief data officer, Mastercard. “We need high data standards that allow us to face these situations head-on, knowing that our practices are sound, consistent and based on treating individuals and their data with decency. For Mastercard, this commitment starts at home, and we’re embedding these principles into how we do business – every day.”
The initiative is based on the premise that businesses have a responsibility to individuals, one another and society as a whole in how they manage their data.
Mastercard is proposing six data responsibilities that will help deliver sustainable data programs designed to best navigate the challenges and opportunities of the digital economy—and how to make that digital economy work for everyone, everywhere. These principles are meant to complement—and not substitute—regulatory compliance.
|The Six Data Responsibilities|
|Security & Privacy||Companies must uphold best-in-class security and privacy practices|
|Transparency & Control||Companies should clearly and simply explain how they collect, use, and share an individual’s data and give individuals the ability to control its use|
|Accountability||Companies must keep consumer interests at the center of their data practices|
|Integrity||Companies must be deliberate in how they use data in order to minimize biases, inaccuracies, and unintended consequences|
|Innovation||Companies should be constantly innovating to ensure individuals benefit from the use of their data through better experiences, products and services|
|Social Impact||Companies should use data to identify needs and opportunities to make a positive impact on society|
According to the survey research, an organization committing to these principles would help drive trust with upwards of 90 percent of individuals. Consumers in India and Brazil are far more positive about the handling of personal data, and more than 50 percent of consumers say they would be more likely to use a company that’s transparent about how it uses data. With these findings, ‘corporate data responsibility’ could become the corporate social responsibility of the 21st century.
Mastercard commits to these principles, making sure personal data is leveraged only in ways that are ethical, compliant within the regulatory environment and enhance the consumer experience. Today at Mastercard, that includes:
o Multiple layers of security, including tokenization and encryption, to protect information
o Expanding the protections of the EU Global Data Protection Regulation (GDPR) globally, including the My Data portal so individuals everywhere will be able to see and manage what personal information Mastercard holds
o Developing a world-class anonymization solution—data trust Trūata—that protects privacy while enabling analytics under the GDPR
o Embedding the Data Responsibility principles into its product development process
o Robust data transfer mechanisms, including Binding Corporate Rules for personal data transfers globally, and certifications under Asia-Pacific Economic Cooperation systems—one of the few companies to achieve both
o A comprehensive data for good program led by the Center for Inclusive Growth, helping to increase the data science capacity of the social and civic sectors through partnerships with organizations such as the Rockefeller Foundation
“At Mastercard, we believe that individuals own their personal data, have the right to control how it is shared and should benefit from the use of it,” said Dimi Dosis, president of Advisors, Mastercard. “And, it’s incumbent on us to protect that data. We’ve embedded this thinking into our product development, and it will inform everything we do moving forward. Innovation is critical to business success, but not at the expense of the individual.”
“Together, organizations have a tremendous opportunity to transform the way we think about responsible data practices and a sustainable data framework that drives universal benefit,” said Stefaan Verhulst, New York University GovLab’s co-founder and director of research and the head of its Data Collaboratives Initiative. “In particular, these principles embrace an opportunity that many other data frameworks do not: using data responsibly to produce insights into societal patterns and behaviors that can help solve real world problems.”
“Mastercard’s Data Responsibility Imperative is a good model for companies that want to use data while honoring individual privacy rights,” said Jules Polonetsky, CEO of the Future of Privacy Forum. “Data is more than just a valuable business asset; principled, moral data practices are a corporate responsibility. In the long run, companies that build trust through principled uses of data – even when there is a short-term cost – will be best suited to thrive in a data-driven economy.”
More information about the Data Responsibility Imperative will be made available shortly. To download the white paper, visit www.mastercard.com/dataresponsibility.
The shape of the SME future
What does the future of technology look like for South Africa’s SMEs? COLIN TIMMIS, general country manager of Xero SA and a professional accountant, looks into the tech crystal ball
Over the past decade, technology has radically changed the way businesses operate. Now, even small businesses have access to powerful tools that were previously expensive or complicated.
The pace of change has been rapid – and it’s unlikely to slow down. Businesses must keep up with technology to stay competitive. According to research conducted by Citrix, 92% of companies across South Africa’s key industries agree that digital adoption directly affects company profits. However, 54% still feel unprepared for the future.
So, what does the future of technology look like for South Africa’s small businesses? How can the other 46% of companies prepare?
5G and WiFi 6 – faster internet speed
In the foreseeable future, we will see a rapid increase in the use of fibre across South Africa. According to Xero’s State of Small Business Report produced with World Wide Worx, 49% of small businesses surveyed used ADSL connections and only 37% used fibre. When asked to describe their internet connections, 45% said they were ‘great’, while 43% said they were ‘okay but not 100% reliable’. 57% of those who said their connection was ‘great’ were fibre users.
South Africa is still playing catch-up in terms of internet connectivity and speed. However, WiFi 6 is set to improve the way routers distribute traffic to connected devices and increase the transfer speeds by around 30%. For when you’re on the go, 5G is the next generation of mobile data standard. It’s already being trialed by South African carrier Rain, and a broader rollout is expected in 2020.
Machine learning and Artificial Intelligence – more efficient software
Even if you aren’t aware of it, you’re probably already using smart software which leverages machine learning (ML) and artificial intelligence (AI) in your business. While only a tiny proportion of respondents (0.25%) from Xero’s State of Small Business Report say they are using them, most businesses are aware of how important they are.
AI and ML are great at taking large amounts of data and spotting patterns that humans might miss. They help businesses cover some of the more routine tasks so they are freed-up to focus on the most important priorities. For example, tedious tasks like bank reconciliation, can now be completely automated.
Blockchain – safer, more secure transfers
If you hear ‘blockchain’ and think ‘cryptocurrency,’ you’re not alone. However, the technology also has something to offer when it comes to existing payment technologies. Through its complexity and high level of encryption, integration with blockchain can make transferring valuable assets more secure. It can also be used for more effective fraud prevention and other security-focused tasks.
The cloud – access data everywhere
Cloud computing is starting to become a standard part of life for many small businesses in South Africa today. According to Xero’s State of Small Business report, 19% of respondents surveyed make use of cloud technology. Of these respondents, 98% reported a significant increase in profit thanks to adopting this technology – and 99% identified an increase in efficiency.
The trend towards cloud adoption is likely to continue as we see the development of technologies, like faster speed through fibre, WiFi 6, 5G, and machine learning powering it.
Integrated financial software
When it comes to accounting in a small business, these new technologies will enable much smarter ways of working. Take bank reconciliation, for example, where cloud storage and machine learning will search through documents and expenses on your behalf to compile reports.
Eventually, we will be able to access everything we want in one integrated, seamless hub. We can see this development through the use of app integration. Xero has 800+ apps already compatible, which enables small businesses to automate, gain better insight and grow their businesses all through one ecosystem of partners.
Access to capital
Open banking, the process of banks and financial services opening their APIs to the market, will shape how businesses access funding. By sharing their financial data instantly, potential investors have immediate access to a company’s revenue, profits and cashflow – enabling them to make fast, informed decisions.
Platforms like Xero keep all of a company’s financial data up to date. That way, when the company needs to file for a loan their documents are ready to go. Xero is also continuously pursuing new partnerships to help fuel small business growth. Earlier this year Xero partnered with three new alternative lenders, to help improve access to funding.
Digital adoption offers an island of stability in the volatile South African economy. Technology allows businesses to run more efficiently, remain globally integrated, and maximise their profits. Companies which keep up with the latest technology, from incorporating it into their processes to training staff, will have a real advantage over their competitors.
Cash is here to stay, and other trends shaping payments
As we enter the next decade, local and African merchants should support payment methods that suit their customers, rather than following global trends just for the sake of it. Peter Harvey, MD of payment service provider, DPO SA, looks at five trends we can expect over the next few years.
- Cash is here to stay – for now
Despite common perceptions, South Africa still has more than 11 million unbanked individuals and cash remains the preferred payment method for these and many other customers.
Harvey says: “As we enter 2020, we can expect a host of new digital payment technologies that sound like excellent options – and they may well be for some – but merchants need to carefully monitor their customer behaviour before they rush to try the latest gadget or fad.”
According to Harvey the banks and card companies like Visa and Mastercard will be placing a large focus on enticing consumers to move from cash to card-based payments in the coming years.
“Overcoming the reliance on cash will take a fair amount of time and effort,” says Harvey. “For merchants trading in a cash-based community, depositing money into a bank that tracks your spending, charges you to store your money, and then charges you again to withdraw it can seem unattractive. At the end of the day consumers will make their decision based on convenience, cost and risk.”
Card payments are expected to morph over the coming years. In South Africa the tap and pay method is becoming more commonplace. Harvey believes this and other near field communication (NFC) methods of card payments will continue to grow in use as shoppers become more trusting of the technology and retailers see the efficiency benefits of moving customers through their purchase cycle more quickly and easily.
- Mobile is still king
There is no doubt that the means to facilitate most digital payments in Africa will depend on mobile technology.
According to South African communications regulator, ICASA, South Africa has a smartphone penetration of 80%. In Sub-Saharan Africa meanwhile, the mobile phone penetration is 50% and the GSMA expects smartphone penetration to grow from around 40% to 66% in 2025.
Harvey says smartphone technology and wearable technology will allow for the growth in some of the newer payment tech, like Apple Pay and Samsung Pay, but these payment methods will remain in the hands of the top LSMs and have little effect on the bottom of the pyramid customer base.
“For the moment USSD technology will still underpin the majority of mobile payment methods. Until smartphones increase in penetration, payments like m-Pesa will continue to dominate. Customers know and trust the solution and its these types of offerings that will need to be beaten by any new entrant over the next two to three years at least.”
- New decade, new banks
Harvey is upbeat about the new digital-only bank offerings like Tyme Bank, Bank Zero and Discovery Bank.
“It appears that 20Twenty was two decades too soon,” says Harvey. “The local markets are now finally ready for a new digital offering without the fuss and cost of the traditional offering. These banks stand a good chance of making an impact and making headway towards financial inclusion in the country.”
Harvey believes, that in order to boost the number of people using digital payments, the banking institutions, merchants and payment service providers need to start incentivising consumers to make the switch. Loyalty and Rewards will start playing an even bigger role in the near future.
- New services for the payment ecosystem
Based on demand, Harvey believes forward thinking payment service providers will work closely with their banking partners to focus on providing their mutual merchants with a ‘fully managed service’. This service includes: instant sign-up; a full suite of payment products; risk screening; account reconciliation; anti money laundering checks; access to shopping cart plugins; and a variety of other value-added services in the online digital payment space.
These services will enable digital retailers to quickly and easily start selling their services online, while protecting them from the associated risks.
The service benefits the banks as well as the broader digital ecosystem, as the payment service provider actively monitors and manages merchants and transactions, removing risk from the process and facilitating ‘good’ transactions.
- Identity technology takes centre stage
Looking at newer technologies, Harvey believes biometrics will continue to be the key focus.
Harvey says voice and facial recognition are set to take off in South Africa in 2020 and 2021 and he believes the key driver in this regard is the increasing use by the government.
“Banks and Home Affairs teaming up for the renewal of ID documents and passports is a major win for the average citizen,” Harvey says. “This falls neatly into the ‘convenience’ motivator and as people use and trust the biometrics used by the banks for this service, they will become less afraid to try it for payments.”
As technology rapidly improves, the payments ecosystem can expect some exciting advancements over the coming decade. Chat commerce and even augmented and virtual reality developments will almost all come with payment features. However, Harvey cautions against over exuberance.
Harvey says “Make sure you cater for what your customer actually wants, not what you think they should want. If working closely with African merchants, banks and customers has shown us anything, it’s that the fastest way to drive away business, is to dictate how customers pay. Provide the options and let them choose.”