How credit unions could help people make the most of personal data

Dylan Walsh at MIT Sloan: “In May of 2018, the EU adopted the General Data Protection Regulation, referred to by The New York Timesas “the world’s toughest rules to protect people’s online data.” Among its many safeguards, the GDPR gave individuals ownership of their personal data and thereby restricted its collection and use by businesses.

“That’s a good first start,” said Alex Pentland, a co-creator of the MIT Media Lab who played a foundational role in the development of the GDPR. “But ownership isn’t enough. Simply having the rights to your data doesn’t allow you to do much with it.” In response to this shortcoming, Pentland and his team have proposed the establishment of data cooperatives.

The idea is conceptually straightforward: Individuals would pool their personal data in a single institution — just as they pool money in banks — and that institution would both protect the data and put it to use. Pentland and his team suggest credit unions as one type of organization that could fill this role. And while companies would need to request permission to use consumer data, consumers themselves could request analytic insights from the cooperative. Lyft drivers, for instance, might compare their respective incomes across routes, and ride-share passengers could compare how much they pay relative to other cooperative members….

Several states have now asked credit unions to look into the idea of data cooperatives, but the model has yet to gain a foothold. “Credit unions are conservative,” Pentland said. But assuming the idea gains traction, the infrastructure won’t be difficult to build. Technology exists to automatically record and organize all the data that we give to companies; and credit unions, which have 100 million members nationwide, possess charters readymade to take on data management….(More)”.