The facts and figures gathered about the spread of the pandemic and the way it was brought under control will be essential to understanding this outbreak and tackling future crises. Yet the same is also true about the impact of the virus on the economy and personal finances – if information is not collected, then governments will not be able to learn lessons and respond more effectively during future outbreaks.
NatWest has teamed up with the Global Open Finance Centre of Excellence (GOFCoE) to begin that process.
Data about customers’ earning, spending and saving has been shared by the bank to give an insight into their personal finances before and during the pandemic – and as we emerge from the other side. NatWest removes personal information that could be used to identify individuals before sharing the data with GOFCoE. This means that any customer data is checked to remove any identifying factors, with small samples and customers under the age of 18 also excluded.
GOFCoE is a collaboration between the University of Edinburgh and trade bodies FinTech Scotland and the Financial Data & Technology Association. The centre was launched last year to improve lives by using financial data to shape policies and services, bringing together the public, private, and third sectors to share information in a safe and secure way.
“Public trust in how data is used is absolutely crucial and so we’ve spent a lot of time and effort with the bank to make sure this data is used in a responsible and secure way,” explains Kevin Collins, Interim Chief Executive at GOFCoE and Assistant Principal for Industry Engagement at the University of Edinburgh. “Our use of the data has a very clearly-defined purpose. NatWest has given us data from one million customers, both NatWest and Royal Bank of Scotland, so we have a sizeable sample from throughout Great Britain. The flow of data is ongoing, so we can chart the progress of household finances as we emerge from the pandemic.”
GOFCOE was one of the first major data-themed partnerships following the launch of the University’s Data-Driven Innovation (DDI) initiative, part of the City Region Deal. Under DDI, the University is creating a network of hubs to help public, private and third sector organisations improve products and services through research coupled with high-powered data analytics.
Shaping support for recovery
GOFCoE has created an economic dashboard using the banks’ data to share insights with NatWest and with UK and Scottish government departments, helping to inform decisions about the policies that will be needed to support the economic recovery. So far, the UK Government has spent £372 billion to support individuals and businesses through the pandemic, equating to nearly £5,600 for each person.
Yet, in order to keep public spending and national debt at sustainable levels, support for the economic recovery will need to be more targeted. Any future pandemics or other international crises will also need to be tackled in a more focused way to make sure finite financial resources reach the people who need them most.
One of the advantages of using financial data from GOFCoE and NatWest Group is the speed with which policymakers can access information, gaining an almost real-time insight into how the pandemic is affecting individual and company’ finances. Previously, the economic data used by governments to develop policy has come from snapshot economic surveys, which take time to conduct and analyse, capture a single point in time, and only represent a small sample of the UK.
“Innovation is key to the UK’s recovery from the pandemic, and GOFCoE’s work with NatWest will help policymakers to understand better the ongoing impacts of the pandemic and potential policy responses to them, as governments across the UK work to build resilient economic recovery plans,” explains David Sweeney, who leads the UK Research & Innovation Strength in Places Fund.
“With this – its first project since being formed last year with support from UK Research & Innovation’s flagship Strength in Places Fund – GOFCoE is showing how innovative financial technology can unlock the power of data as a force to tackle the biggest issues facing the country and the world. It’s also an example of the many economic and social benefits generated by universities such as the University of Edinburgh.”
Keeping customers’ data safe
Underpinning NatWest and GOFCoE’s partnership is a focus on keeping data safe and secure. GOFCoE has access to the University of Edinburgh’s Financial Data Safe Haven, which provides the infrastructure needed to maintain security.
Yet keeping data safe is about more than simply fighting off cyber criminals. Customers want to know that their privacy will be protected and need to trust the companies and organisations that will be using their information.
GOFCoE has tackled these questions by creating transparent legal agreements, not only with the businesses and organisations supplying data but also with the governments, researchers, companies, and other bodies that will have access to the insights. Those agreementsare based on industry best practice for sharing data – to give consumers confidence that their data is in safe hands and go beyond simply examining the legal ramifications of data sharing by also exploring the ethical considerations.
It’s important to note that GOFCoE only ever shares the insights gathered from the data and never shares the actual data with anyone else.
One reason for building strict governance rules into GOFCoE’s foundations is so the data it uses may form part of its Global Economic Observatory (GEO), a long-term study of financial data to provide richer, faster, more connected, and more accessible economic insights. In the past, governments and researchers have not been able to access up-to-date and accurate financial information held by companies and organisations. GEO aims to bridge that gap by providing a safe space that’s trusted by individuals, who ultimately own data about themselves.
“Post-Covid, we’ll be able to look at issues like financial inclusion, the poverty premium, and how people are saving for later life,” says Collins. “All of these areas are being affected by the pandemic.”
Professor Jonathan Seckl, Senior Vice-principal of the University of Edinburgh, explains the importance of this ‘higher purpose’: “Using real financial data for social good – and allowing governments, companies, and people to make better economic and financial decisions – is at the heart of GOFCoE. The observatory will provide much-needed research from real data to aid governments around the world to get back on their feet after the tidal wave of devastation caused by the Covid-19 pandemic.”
Insight to create services
Dan Globerson, Head of Open Banking at NatWest, adds: “Using real financial data for social good and allowing governments, companies and people to make better economic and financial decisions supports our approach to sustainable banking and our journey to become a more purposeful company. This partnership will provide much-needed research from real data to aid governments around the world to get back on their feet after the tidal wave of devastation caused by the Covid-19 pandemic.”
Beyond the economic recovery from the pandemic, the data shared between NatWest and GOFCoE is already being put to other uses to benefit society. The information is helping to fuel research into how financially vulnerable older people are saving for their retirement, in partnership with Standard Life Foundation.
Meanwhile, cash from the Industrial Strategy Challenge Fund is supporting a project as part of the Healthy Ageing Challenge, which aims to “provide an extra five years of healthy and independent life by 2035”. The data will help to design government policies that will support older people to continue to work for longer, improving not only their financial health but their overall wellbeing too.
NatWest has been the first bank to contribute data to GEO and now GOFCoE is in talks with other financial services companies to bring further information into the observatory. “We hope other banks will now follow NatWest’s lead in sharing data to help tackle some of the biggest challenges facing our society,” says Kevin Collins.
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Picture credits: woman in mask – d3sign/Getty; financial data – Thana Prasongsin/Getty; contactless payment – Tim Robberts/Getty