BENGALURU: In a first of-its-kind initiative, a slew of consumer-focused startups are coming together to share data on user behaviour aimed at weeding out bad actors and rewarding the good, said company executives. The consortium that includes scooter rental firm Bounce, home rental startup NestAway, insurance startup Acko and preowned two-wheeler financier Wheels EMI expects the under-construction technology platform to be operational by early next year.
The proposed rating system will use data on the offline behaviour of users to assess them on their creditworthiness or eligibility for a digital service. For instance, a habitual traffic offender may be denied service by Bounce while Acko may charge a premium for the person’s insurance policy.
“About 60,000 people use our services daily and are being rated on various factors. We have started blacklisting people who are habitual offenders,” said Vivekananda Hallekere, co-founder, Bounce. “Other companies, be it a house rental app or an insurance provider, could also use this rating to assess consumer behaviour before offering their services.”
Experts said the proposed framework of services is similar to what credit bureaus offer to financial services companies.
“With the rental economy on the rise, it will be important for companies renting out their assets to customers to be able to verify their credibility in order to protect those assets,” said Jitendra Gupta, founder of CitrusPay and former MD of PayU India, who is an advisor to the consortium.
The objective, however, is not just to penalise those who cause damage or break rules, but also offer incentives to those who abide by the laws, Hallekere said, adding that Bounce has completed 10 million trips so far and it collects 2 million data points each month.
Until now, these companies have been able to only look at financial transaction data and behavioural data from social networks to understand their customers.
Platform to Take User Consent
“We already have know-your-customer (KYC) details of our customers and also data on how they behave on the Internet. But, a lot of opportunities exist to collaborate with ride-sharing companies, banks and telecom firms to exchange data and offer better services,” said Varun Dua, co-founder, Acko General Insurance, which sold 1.54 lakh policies worth Rs 66.9 crore in the quarter to June 2019.
The proposed data sharing platform will seek a user’s consent before sharing the data. For companies like Bounce, this could be baked right into their terms of service, company executives said.
Legal experts are of the view that while the creation of such datasharing frameworks between corporates is very natural in the evolution of technology, there is need for caution as India does not yet have a data protection law and, such frameworks between companies could impede upon customer privacy.
Apar Gupta, a lawyer who is also the executive director of the Internet Freedom Foundation said, “The safeguards for the implementation of such frameworks is not in place, and the degree of problems they might create are unforeseeable.”
It is also unclear if fintech firms that partner with the consortium will have to pay for the data on users, or if there could be some kind of barter system put in place. “No company would want to share the data without any commercial attachment to it,” said Karunakaran V, co-founder of WheelsEMI, which has lent to around 40,000 unique users so far.
Source: Small Biz-Economic Times