G20 Japan Digital
G20 Japan Digital    Data
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Bo Harald

Data for the life events for all.
Bo Harald
Founder/chairman, Real Time Economy Program and


How to talk about the emerging data society is extremely vital.
We need a simple story.
I always talk about its value from the expression, “serving life events”.
The concept the Japanese prime minister has presented at Davos in January 2019 was, “Data Free Flow with Trust.” First of all, what was your impression upon hearing this?
I think it's fantastic that the prime minister himself had presented such a concept. Can you tell him on my behalf, well done.(laugh)
Certainly, if I have the opportunity(laugh).
Digitalization and the arrival of the data society is something that will completely transform the human history from ground up. But what we need to think about is the two sides of data. The first is “My Data” and the other is “Big Data.” Combining the two and integrating AI, as needed, allows us to generate solutions for the “life events.”
When we talk about data, many would immediately think of Big Data.
If so, it is even more important that we talk about how our data society should be. The narrative is so important. We need a simple story to get the people and the politicians to even demand the data-driven solutions. At “” where I'm one of the founding members, we place much emphasis on this very point. This is why we always talk about its utility value from the phrase, life event.
How did you personally come to recognize the power of data?
It was back in the late 70s when the e-banking was launched in Finland for the first time. I was driving the very project at Nordea Bank. At first, it was well received because it allowed customers to do banking without physically going to a branch or an payment ATM. But gradually, we began to hear of complaints such as why do I need to manually input the numbers printed on the paper invoices. From this came the idea of e-invoice where invoices are sent electronically to the e-bank. Then it was possible to pay invoices just by pressing accept or later just A in the mobile phone invoice message removing all the frustrations. When we launched e-invoice, this naturally highlighted the necessity of having electronic receipts to automate accounting and that's how e-receipt was born.
Bo Harald
Was Nordea Bank the only bank that proceeded with the e-invoice project at the time?
Nordea Bank came up with the idea but it's pointless if only one bank was engaged in such an initiative. It needs to function as an ecosystem, so we had to build an e-invoice network with other banks and service providers. It as like developing a payment network in today's terms which required so much effort in developing an open interface and standardizing data contents much to support competition and automation.
I see.
Originally, it was for the purpose of making payments convenient, then for improving productivity through very large cost reductions but gradually, we began to see the utility value of data through the operation. When we look at an invoice or a receipt, we see that VAT is included as one of the data elements which is obviously an essential information linked to the tasks of the tax office and accounting but what's more, it reveals who purchased what and where to the last detail. Once we get a hold of such data in real time, we can make real-time VAT reporting possible. Obviously, privacy of businesses and individuals must be safeguarded but it was extremely revolutionary that the economic trend can be revealed in real time through such data. So, in 2006, the project, “Real Time Economy Program,” was launched by us at Tieto Plc and supported also by the Aalto University, accounting industry and the public sector.
At what point did the government get involved in the e-invoice efforts?
Early on in the process, the Finnish government was estimating the cost reduction achieved through digitalization but they weren't brave enough to get on board like the Danish government in 2005-2006. Back then, the Danish government made it a mandatory that all invoices to the central and local governments had to be submitted electronically. The Finnish government remained reluctant to enforce such a policy but has now achieved very close 100% with milder methods.
Do you personally agree that governments make digitalization a mandatory as Denmark has done?
Most definitely yes. I strongly believe it should be done but what a government must do prior to this is to have the banks and other financial institutions roll out a safe, low-cost, and simple standardized e-invoice that is standardized as part of e-banking for the SMEs. After this, there should be some time given for adjustments and then decide on a deadline for accepting - and soon after allowing any paper or e-mailed PDF invoices. Of course, there should be room to acknowledge exceptions in certain cases.
The discussion around personal data revolved around the concept of privacy but in the recent years, it has shifted to also promote the fact that the legal framework in Europe grants individuals to access their data as needed.
You mentioned about ‘life event' at the start of this interview. Can you explain the thinking behind this?
The concept already existed in 1999. What Nordea Bank was attempting at the time was to find a way to realign the financial services so that they can be displayed according a list of personal life events meeting the users when they log into their online bank account. We assumed that the future of banking business will be founded on their ability to support customers through their life events such as marriage, new baby, new housing, buying a car, or starting a business. However, we discovered that the banks only had data related to money and not enough to fully support the life plans of their customers.
What do you mean by that?
This is how it goes. For example, let's say you are looking for a new job. You start by empowering your bank or any other service provider you trust to gather essential information for your job hunt. The gathered information will automatically be used to fill in the mandatory fields for the job application forms. The idea is for the bank to become the ‘data service provider' which allows you to manage all the data spread out such as driver's license, medical diagnosis, salary slips from your old employer, etc. to do something. The GDPR is the law that was enacted in 2018 which recognizes the individual's right to know where one's personal data exist and access as needed. For years, much of the discussion around personal data revolved around data protection and privacy but in the recent years, this is shifting to focus on the legal framework which allows individuals to access their personal data as needed.
What are the challenges to make such data ‘free flow' a reality?
If a data service provider is to gather data essential for your life event on your behalf, the first thing to do is to make sure that the interface be standardized across all data storages out there. EU has the “PSD2” law which is an open API for bank accounts. We need similar standardization across for example healthcare and logistics data. Such standardization effort has just started in the EU but this allows us to manage data legally and with more ease in adoption from a technical and security perspective.
Bo Harald
How will such data be of use for the public?
Initially, cost reduction was the driver for launching the Real Time Economy Program in Finland back in 2006. This was about using digital technology to automate economic activities for speed and convenience thus cutting costs. The importance of data would only become evident once that has been established. If documents in an economic activity are exchanged without the need to individually gather essential data, it would reduce the workload, time, as well as mental cost. This is the first step to data utility. The second step is to make use of data that's out there somewhere which may potentially be useful for your life events. The third step is to combine both personal and Big Data to provide the possibility of a better choice. I believe substantial data utility would evolve in such stages. If Real Time Economy promotes data use for improving productivity, MyData promotes a fuller set data use to deliver more convenience to individuals.
What do you mean specifically by data that is out there somewhere which may potentially be useful?
For example, it would be data that companies called platformers are obtaining. I believe one of the critical purposes of GDPR is to recognize that individuals have the right to access such data.
Will such data be useful for individuals?
There are so much amazing data just sitting there but the reality is that they are not necessarily organized in a way that can be utilized.
Connect the information up on the four screens and combine this with Big Data will help over 20million SMEs across Europe.
In your opinion, we have yet to fully uncover the utility value of data?
At the present time, that is exactly it. But the progress in using AI will definitely drive the data utility forward. In 2018, I wrote about the future office landscape of the Ministry of Finance in my blog titled, “Four Big Screens.” There were four large screens where one of them would display the real-time income of the entire population. This has already been technically deployed in Finland where when someone is paid their salary (soon also pensions and socials support) this is automatically reported to the tax system mostly in real time. This leads to very large cost savings, real time taxation and allows the relevant authority to collect Big Data about how much salary is paid in what part of the country, with industries, what type of employees etc, each day on the screen. The second shows all the e-invoice and e-receipt exchanges which reveals how much money has been paid where and for what. The third real time screen displays the flow of investments (shares, bonds, real estate etc) and bank balances, in other words what not has been spent. Finally, the fourth screen shows the turnover of companies generate based on their VAT returns.
Bo Harald
I see.
By connecting the Big Data on the four screens with corporate MyData, we can definitely help nearly 20million SMEs across Europe when they and their empowered accounting firms will be given access to such data. Such discussions may be taking place in Japan but when I shared this vision with the European Commission, they were extremely interested.
The data that the Ministry of Finance is seeing is not exclusively for the government but is considered a public asset where anyone has an access to. Is this correct?
Yes, but this is not just limited to the Ministry but if often seen across various offices. However, we still need to discuss if Ministry of Finance is the best agency to consolidate and disclose the Big data to the businesses and the public.
* Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of G20 Ministerial Meeting on Trade and Digital Economy.
Bo Harald
Founder/chairman, Real Time Economy Program and
In addition to acting as a founding member of the MyData Global Network and the founder of the Real-Time Economy Program, he has also works on boards and as an advisor to startup companies and governments. He has been in the banking industry since the 1970s and works for the Union Bank of Finland, Merita Bank, and Nordea Bank. In Nordea Bank he has committed to the digitization of banking services, and gathers trust from inside and outside of Finland as the “Father of e-banking” and later “Father of e-Invoicing". After leaving Nordea in 2005, he worked at Tieto Plc until 2013 and now acts as an independent advisor and board professional.


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