A few big regulatory bodies are slapping down some massive pieces of legislation over the next year or so.
The first is the General Data Protection Regulation (GDPR), an EU regulation which comes into force in May 2018. The second is ‘Open Banking’ – the Competition and Market Authority (CMA)’s attempt to have the average bank’s customer’s voice heard (crazy, right?).
On the surface, regulation looks like the arch-enemy of innovation. Nothing but red tape and bureaucracy.
But maybe it’s more of a Professor Snape thing.
You know, something that LOOKS like the bad guy, but in the end is really only looking out for us.
Let me explain.
I suspect that even though the firms impacted by them will be complaining about the costs involved and potential impacts on their business models, these interventions may actually have positive impacts.
Let’s talk General Data Protection Regulation first.
It’s likely to impact all businesses, but most significantly those involved in sharing 3rd party data. Advertisers, in particular, will be hit hard. Oh, and by the way, this will impact any business that holds data on EU citizens… in case you’re a UK business thinking you don’t need to bother because of Brexit.
However, for all the fuss it’ll cause, the winner in the long-term from GDPR will be the consumer.
Clearly, there will be costs associated with complying, but GDPR will create a situation where businesses will have to use consumers’ data for good – to develop products, services and adverts which truly benefit people – otherwise those consumers will just pull their data.
Anyone like me, currently feeling like much of digital advertising is a bit of a ‘spamscape’ must see this as a good thing.
The second bit of regulation relates to banking – looking at you, traditional banks.
The UK’s Competition and Markets Authority is taking action to force banks to work harder for customers and fully exploit the benefits of new technology. The CMA will require banks to implement Open Banking by early 2018, publish trustworthy and objective information on quality of service on their websites and in branches, and remind their customers to review whether they are getting the best value and switch banks if not.
Unless you’re a bank focused solely on maximising your very short-term margins, that must be a good thing for us all.
At the end of the day, in my mind, the right way to go for long-term success is to put the consumer front and centre of your business. Sometimes, with the constant pressure to deliver short-term results, businesses find that hard to do.
Regulation might not be a magic wand to produce innovation, but at least it will help keep us all honest.