Data Governance Act: A Unique Opportunity to Enhance Data
Here’s how to benefit from the Data Governance Act while maintaining data privacy and compliance.
Detecting weak signals, analyzing behavior, fighting against fraud, and developing new services require having all the data possible to enhance them. Frédéric Fourquet, data intelligence product marketing manager, MEGA International, says this is the major objective of the Data Governance Act (DGA) recently validated by the European Council to organize data exchanges for more performance and innovation for companies.
Creating a “data-driven” Approach
The Data Governance Act is a European regulation on data governance that aims to transform the practices of private and public organizations. This act aims to organize and regulate the future data sharing market through fundamental principles of security, compliance, sovereignty, and ethics. The European Commission wants to put an end to the “Wild West” that global data exchange has become and make it a pillar of the economy.
The four main objectives of this new regulatory framework are to promote the reuse of public sector data, to create a new business model for data intermediation, to encourage altruism in this area, and to create a committee promoting data innovation.
The Data Governance entered into force on 23 June 2022 and, following a 15-month grace period, will be applicable from September 2023. Some European countries and companies are already taking the lead in this revolution. Most players, public and private, will need to prepare early to take advantage of this opportunity.
Europe was a pioneer in Data Privacy with GDPR. This regulation became a source of inspiration for similar regulations all across the globe with acts like the California Consumer Privacy Act (CCPA) and Brazil’s LGPD. We can assume that the Data Governance Act, concentrating and refining all the best data sharing practices ethically, may have the same impact outside Europe in the coming years.
Establishing a Trusted Data Environment
The Data Governance Act creates a very promising incentive environment based on the definition of a precise framework for the exchange of data (Data Exchange). It defines new roles both on the data supply side and to regulate and oversee the reuse of new data exchanged.
A new certification for data sharing service providers has been defined as registered data intermediaries. Subject to significant technical and ethical obligations, a registered data intermediary protects the circulation of data. This approach ensures transparency and trust between all stakeholders, which is paramount to ensure that the European Data Exchange market is trusted and upholds high data usage standards.
Regulate Exchanges to Create Value
Globally the minimum expected benefits from data usage are innovative products and services generating at least 1% to 2.5% additional GDP in the European market. Companies will have new opportunities to become innovation champions in the region before competing abroad. With simplified access and reduced costs for external data acquisition, companies will have useful assets to boost R&D and data-driven AI. This will be of particular benefit for start-ups and mid-size companies that previously could not access or afford these data resources.
Coverage for All Data Types
The Data Governance Act concerns the sharing of all types of data, personal and non-personal. It also aims to motivate all organizations in the private and public sectors without distinction to facilitate and set up new exchanges.
These data topics were historically not fully addressed and could be new opportunities if treated in an ethical and secured way.
The DGA thus relies in part on the application of the General Data Protection Regulation (GDPR). Personal data always benefits from the same protection measures as non-personal data, such as anonymization and gaining consent from the data owner. The new DGA is incentive-based: it does not require anyone to make their data available, either for free or commercially, but instead allows each player to define the conditions for appropriately reusing their data.
See More: 3 Questions To Drive Better Data Governance
Benefits from DGA
While institutions can facilitate and develop the Data Exchange, only companies have the keys to benefit from this new data act. It is essential that everyone organizes their data governance and seeks to industrialize it. Let’s face it, the work for those who intend to join this “data-driven” approach is considerable. Compliance, cybersecurity, the definition of areas for innovation, and the selection and adoption of technological solutions are just a few challenges to overcome.
The DGA involves a new organization and a new way of thinking about companies and their data exchange practices. Experience shows that innovation is always born of micro-projects driven by business lines. It remains fragmented until one subject stands out, to the point where it becomes so important that senior management takes it over.
Industrialized Data Governance Approach
An industrialized approach to data governance makes it possible to select new data aligned with the company’s strategic objectives and monetize this data. To do this successfully, an organization needs answers to these questions: what new data do I need? What artificial intelligence projects are currently in my business? Which data trajectory should I define? Who organizes and oversees the data governance process?
It is useless to create a large data market if companies do not know how to identify their areas of innovation in data if they still lack data analysis and processing solutions, and if their data is neither qualified nor exploited.
Once the answers to the above questions are answered, appointing a Chief Data Officer (CDO) is the next step. And the first duties of building a data governance community include creating a data catalog to automatically generate a business glossary to enable the entire data community to work off a common shared business language.
For data monetization, the CDO will have to identify the interested industries and set the price of the data sets. This is good news because new secure platforms of trusted operators will have been created to promote data distribution, its innovation capabilities, and its ability to help stakeholders make smarter, data-driven decisions.
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