As the host of this week’s G20 Summit in Osaka, Japanese prime minister Shinzo Abe is determined that the ongoing trade war between the US and China will not derail his plans to start hammering out a new international framework for data governance.

But his ambitious plans for a system that he calls ‘Data Free Flow with Trust,’ or DFFT, come at a time when many governments worldwide are clamping down on cross-border data transfers. China and Russia, for example, are beefing up already restrictive data localisation laws and policymakers in Vietnam, Nigeria, Indonesia, and India seem increasingly drawn to that approach, too.

The danger is that fragmented approaches to data privacy could negatively impact international commerce. After all, the free flow of data across borders is vital to economic growth in the digital age. It reduces the constraints of distance, shrinks transaction costs, accelerates the spread of new ideas and business models, and lowers barriers to market entry, enabling companies of all sizes to serve vast global audiences.

As Mr Abe stated: “Digitalisation of the economy has enabled unique and unprecedented business models, but it has also brought new challenges… We can resolve such issues only through international cooperation.”

The Business Perspective

The implications for businesses worldwide are clear: a build-up of fragmented approaches to governing personal data will only serve to complicate global commerce, whereas the right framework of rules, backed by widespread governmental consensus, could do much to support and encourage the kind of responsible innovation that benefits us all, both as customers and as citizens.

With that in mind, many business leaders will welcome the idea of ‘Data Free Flow with Trust,’ with its promise of a smoother path to cross-border data governance compliance.

Compliance is not merely a burden. Many businesses have already seen how improved data governance associated with a thoughtful compliance program can lay the groundwork for innovation, greater insight, and better customer experiences. Good data governance means they know when and why data was collected where it is kept, how it is being used, and who it is being shared with. The resulting transparency gives them confidence in its integrity and that they are using it with consent for the right purpose to drive better business outcomes.

Data governance, AI and digital transformation

Allowing the free flow of governed data is a potent fuel for further digital transformation. After all, if data already drives the global economy, it is increasingly key to adopting newer, more sophisticated digital approaches. Consider the use of artificial intelligence and machine learning in the enterprise. Worldwide data governance can help reduce data bias and variance, as well as provide visibility into international processing pipelines to demonstrate trustworthiness and compliance of algorithm outputs.

AI’s benefits can be far-reaching and, in some cases, life-changing. It will help healthcare companies to diagnose and treat patients more precisely. It will enable retailers to anticipate consumer demand for particular products, reducing waste while keeping supermarket shelves stocked. It will help manufacturers shrink their carbon footprints by streamlining supply chains. And it will allow city authorities to make urban centres better places to live, by reducing traffic, pollution, and crime.

Trusted data: A shared responsibility

The ethical use of data is a responsibility shared by both government and businesses. It’s also an area where citizens and consumers are keen to see improvements, according to a World Economic Forum survey of almost 19,000 adults from 26 countries, published earlier this year.

Only one in three survey respondents claim that they understand how much personal information companies hold on them and how they use it. When it comes to local/national government, meanwhile, even fewer have a clear idea. Either way, only 36% of respondents trust organisations in either the private or the public sector to manage that information appropriately. This suggests plenty of opportunity for collaboration between the two on how the consumer trust gap might be bridged.

Consensus for a global framework can allow whole populations to participate in the very real economic and societal benefits promised by digitalisation.

3 Things That Will Change the World Today

Trusted advisors: Bridging the data governance gap

As world leaders gather in Japan for Osaka G20, it’s important to recognise that business leaders have an important role to play as experienced advisors to policymakers. Through their ongoing work on data governance, they are in a position to offer first-hand wisdom on what is working to build consumer trust while simultaneously delivering increased value. And they are also well-placed to urge for caution, if overzealous policing threatens to stymie their organizations’ ability to find new, more intelligent, data-driven ways to deliver goods and services that satisfy customers’ ever-increasing expectations for speed, convenience, and greater personalisation.

The stage is set this week for government and business to start bridging the ‘data governance gap’ and work together on rules that set out to tackle privacy and security concerns, while promoting inclusive, sustainable economic growth and secure international data flows.


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