Introduction

With the advent of technologies like 5G, edge computing and the Internet of Things, the amount of data being gathered by businesses is growing exponentially. Data is one of the key drivers of modern economies, with The World Economic Forum calculating that the global value of data exceeds $3 trillion.

Businesses recognise the value of data as an asset in, and of, itself. That data can unlock insights into an existing business, but the potential is often much greater when multiple, complementary data sets from different sources are brought together.

This brings new opportunities to share and exchange data that have not existed before. Whether it's to aid efficiency, in the name of public interest, for commercial purposes or to support innovation, data sharing is a now a regular practice for many organisations, who rely on it as a fundamental part of their growth strategy.

Sharing non-personal data with suppliers, customers and partners offers businesses the opportunity to enhance products, boost sales, improve operations, and even create new revenue streams.

In the UK, the National Data Strategy includes the ambition to 'unlock the value of data across the economy'. The country's pioneering Open Banking initiative, which obliged nine UK banks and building societies to allow licensed start-ups to access their data, has demonstrated the potential of B2B data sharing: as of January 2023, 7 million consumers and SMEs have used Open Banking-powered services.

However, B2B data sharing is something that needs to be approached with due care and planning. Companies must uphold the rights of data subjects and other stakeholders when sharing data, as it can expose them to the risk of privacy breaches or cyber attacks. But there are also other risks and factors involved when it comes to data sharing that businesses need to be aware of.

As well as data protection and cyber security, considerations relating to rights over data, legal structures, ethics and standards, integration and architecture are key. Our Data Unlocked series sets out what businesses need to know about these topics in order to share data safely and successfully, read the articles below to find out more.

Data protection and cyber security

Complying with privacy and cyber security obligations is essential for businesses to truly benefit from B2B data sharing. Otherwise, the consequences can be severe, from business disruption to reputational damage and even regulatory penalties.

Businesses are dealing with ever-growing volumes of data and the risks, from breaches of privacy regulations and data protection laws, to falling victim to a cyber-attack, are also growing. There are particular threats around sharing data blended from other data sets, and incorporating personal data into those products or services. Ransomware has also become a top security concern for businesses.

However, there are ways to mitigate both privacy and security risks. Training, infrastructure investment and careful planning, as well as a thorough understanding of their data assets, are key for businesses to protect themselves. If done correctly, the risks should not stand in the way of effective data sharing.

Read more about data protection and cyber security

Legal structures

As with any commercial relationship, there are many potential ways for an agreement between two or more businesses to share data to go wrong.

For parties entering a B2B sharing initiative, it is crucial that they ensure their legal rights and responsibilities are defined and protected. However, as B2B data sharing is a relatively new field, there are few laws that explicitly govern the subject matter of 'data', unlike with personal data sharing.

Creating a legal framework that protects data sharing organisations' interests is therefore key. Contractual agreements between the parties or creating a new corporate entity are two of the main approaches to doing this.

Read more about legal structures

Rights over data

Many businesses may think that they own the information stored in their databases and other IT systems, just like any other asset.

This is a common misconception. Data cannot be owned like a physical asset, for many of the same reasons that make it seem shareable. It can be replicated without diminishing its value, for example, or combined with other datasets to create something new.

Businesses should instead consider the rights over data: the right to use it, to share it, copy it, delete it or even to profit from it. When developing a B2B data sharing initiative, it's important for businesses to look at what rights are held by which stakeholders (including their own), their responsibility to uphold those rights, and how to do so.

Like many aspects of B2B data sharing, this requires careful planning to mitigate the risks and maximise the chance of success.

Read more about rights over data

Ethics

Digital technology is evolving at such a fast pace that innovative businesses may be using data in ways that aren't yet governed by law.

This may expose customers, employees or other groups to risks for which the law offers no guidance on how to manage – and put the business in danger of reputational damage.

Data sharing organisations are increasingly adopting data ethics frameworks to address this issue. Data ethics initiatives can help to limit the potential risks of B2B data sharing projects, though businesses must also ensure that their ethics frameworks are integrated with more concrete legal obligations.

Read more about ethics

Standards, integration and architecture

Although data can be easily shared with a click of a button, whether that's via email or a cloud storage service, building a B2B data sharing capability is not as technologically quick or straightforward.

Many business IT infrastructure has not been designed with either data sharing, or 'big data', in mind. It's therefore important to ensure that systems to capture, store, manage and process data are up to the task.

One of the challenges is to ensure that data is kept in a format that can be used and understood by all parties involved in data sharing, which often relies on industry standards. Creating an IT architecture that supports multiple data sources and allows for a high degree of automation is also key.

Read more about standards, integration and architecture

No simple answers

There is currently no 'playbook' for B2B data sharing. Organisations are instead having to develop their own best practice.

For this reason, B2B data sharing initiatives need strong support at the highest level.

B2B data sharing is still in its infancy but it has the potential to become a widely adopted business strategy, with increased government support and innovative organisations paving the way for others. To set themselves up for success, businesses should be asking how data sharing could work for their organisations sooner rather than later.

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.