The 'smart data review', opened by the government late last week, will look to understand how best to open up business' access to data to help them deliver new services to consumers, the government said.
"New technologies have the potential to address many of the problems consumers face in regulated markets and strengthen competition," the government said. "These include innovative intermediary services such as automatic switching services and utility management services, as well completely new business models and providers."
"These innovative services depend on access to customer data, however too often this data is locked away in a manner that works against consumers and innovators. For example, the development of many of these services are constrained by difficulties in accessing data on consumers’ current tariff, their usage and the other available deals in standard formats," it said.
The smart data review was opened on the same day that the UK's Competition and Markets Authority (CMA) announced that it would investigate a 'super-complaint' over a so-called 'loyalty penalty' that consumer watchdog Citizens Advice, which lodged the complaint, says consumers pay when they stay with their existing providers in the mobile, broadband, savings accounts, mortgages and household insurance markets.
The CMA has 90 days to publish a response to the complaint. It could decide to open a more in-depth market investigation or recommend changes in legislation, among other potential outcomes.
"Our response will set out the CMA’s views on this important issue and any next steps we think are needed to make sure businesses don’t take unfair advantage of their long-standing customers," said Daniel Gordon, senior director at the CMA.
The CMA has invited stakeholders to give their views on the issues raised by the super-complaint by 14 October. Among other things, the regulator has asked whether there circumstances where a ‘loyalty penalty’ is not problematic, and whether additional protections are needed to help vulnerable consumers.
The Financial Conduct Authority (FCA) said the super-complaint identified issues that it has concerns about too, and confirmed that there will be a likely cross over between what the CMA will investigate and what it plans to look into shortly in the insurance market.
Andrew Bailey, FCA chief executive, said: "Citizens Advice has raised a number of important issues and we will work closely with the CMA as it investigates this super-complaint. We expect firms to look after the interests of all customers and treat them fairly, whether they are new or long-standing. It is important to get the balance right so that existing customers do not miss out on the benefits of competition and innovation, including when they purchase or renew their general insurance products. The general insurance market study we have announced today will help us examine the issues we have already identified in the market in more detail."
The government, in its terms of reference for the smart data review, which is to be concluded in the first half of 2019, referenced automatic switching services as an example of "innovative intermediary services" it is seeking to support.
"The review will identify the steps that the government, regulators and others need to take to: accelerate the development of innovative intermediaries and other services which can improve the consumer experience in regulated markets; ensure that a wide range of consumers can benefit from these innovative services, not just those who are already highly engaged and digitally confident; establish a regulatory and policy framework which builds consumer trust in data portability and innovative intermediaries and supports an effective market for these services, including addressing any undue barriers to roll out," the government said.
Lessons may be able to be learned from other data portability initiatives, including the UK's open banking regime, the midata scheme and the data portability requirements set out in the General Data Protection Regulation, the government said.