The Bank for International Settlements (BIS) – a meta bank for the world’s central banks and facilitator of cross-border payments – has advocated new governance systems that promote owner control of data and transparency over its use.

In a report released on Thursday, the BIS argued that market failures mean that restoring de facto control of data to those who generate it has become necessary – along with requiring permission before service providers collect, share, and process it.

Those market failures stem from consumers and businesses not understanding the benefits and costs of the sudden deluge of data they generate, as well as finding it difficult to assert any rights over it even if they do.

Furthermore, consent is often given once, despite use of data changing over time without re-confirming consent. And then the data is siloed and stored on corporate platforms in incompatible formats, making it difficult for those generating it to make good use of it. But it leaves a lucrative opportunity for other entities.

“Examples of societal costs include compromising trust in a competitive commercial and financial system as ‘value’ is traded without the participation of those who created it, and loss of the ability to generate the large anonymized data sets that are crucial for research and development, thus driving innovation,” wrote the authors.

To restore control and be effective, the BIS called for the creation of consent systems that are user friendly, offer low transaction costs, and operate as public-private partnerships. To achieve cost savings, the org argued data management must be digitally based and scalable across large numbers of users.

As for the public-private partnership, BIS said the public sector should be responsible for the foundations – like legal and policy underpinnings – while the private sector develops and maintains the back-end tech and consumer interface.

BIS also outlines five standards to make sure the data is governed with consent. These include: that there is a clear communicated purpose for the data; it is minimal in nature; retained for a specific and minimal time period; used only for the purpose it was shared; and kept securely.

With the exception of some individual states enacting laws like California’s 2018 Privacy Act, data privacy has not progressed much in the US since the 1970s, when the obligation of data controllers was outlined in what would later be known as the Fair Information Practices Principles (FIPPs).

The report notes that the US is home to most of the world’s data-amassing Big Tech operations.

In the EU, the General Data Protection Regulation (GDPR) stipulates consent for processing of personal data, but enforcement has sometimes proven problematic. The EU is considering additional legislation – including the Data Act, Data Governance Act and Digital Markets Act – which could eventually help.

“While data collectors are subject to strict compliance obligations, technology companies are still free to operate in much the same way as before simply by obtaining prior consent to do so,” explains BIS in regard to the EU and GDPR. ®