Personal data has been described as the “new 'oil' – a valuable resource of the 21st century” in “Personal Data: The Emergence of a New Asset Class,” a 2011 report by the World Economic Forum. This view has been embraced by many countries that have established legal and other frameworks to herald an era in which personal data is widely but safely used.
In Japan, Dai Nippon Printing Co., Ltd. (DNP) was one of the first companies to notice the potential of this trend. Fumie Katsushima, manager of DNP's VRM Business Planning & Development Department, was one person at the forefront of this development.
Katsushima would eventually participate in government efforts to conceive an information trust bank, which plays an essential part in circulating personal data by storing and providing them to third parties at the request of individuals. The term “information trust bank” was incorporated in Growth Strategy 2017, which was approved by the Cabinet.
Under the law, personal data belong to individuals. But in reality, many corporations such as transportation, credit card, distribution and retailing companies gather and keep control of personal data, while GAFA (Google, Apple, Facebook and Amazon) control the data on almost all browsing history. “We can solve some social problems by returning personal data held by companies to people, who would then circulate their data at their own initiative,” Katsushima said, underscoring the significance of building a new mechanism that includes the information trust bank system for circulating personal data. “That will benefit both individuals and businesses.”
Undertakings envisioned under the new mechanism revolve around finding solutions to social problems, such as a system to gather daily data on diet and physical conditions for tailor-made health management and a scheme to collect and analyze activity data on local residents and tourists to discover unexpected tourism resources or highlight problems faced by local residents.
Sudden order from the top to make VRM business
In 2013, Katsushima was suddenly ordered by DNP's top management to create a new business based on the concept of VRM (vendor relationship management), an unfamiliar term that now features in her department's name. VRM calls for each individual to manage and use his or her data, which are returned from relevant companies and organizations.
Katsushima had been with DNP for 15 years and was wondering if she should just continue on the same career path. “I had been thinking about businesses in which DNP could earn money by doing things of social significance,” Katsushima recalled. “But to do that, I needed a foundation for these businesses. Honestly speaking, VRM was not something I had in mind, but after getting into it, I learned that I can use what I have done in data business. I realized VRM has a lot of potential.”
VRM was still a new concept and Katsushima struggled to find experts on this subject, which the World Economic Forum mentioned as a way to empower people in 2013. U.S. journalist Doc Searls started Project VRM when he was a fellow at Harvard University in 2006, so she read his book, “The Intention Economy,” and approached people covered in this book. She also contacted the Big Data Consortium without Data Acquisition as soon as she learned that the group was trying to propagate VRM.
Before taking on the VRM project, Katsushima was a consultant who used data to help clients improve their sales, profit ratio and other corporate performance indicators in what is called customer relationship management (CRM). She also was involved in a regional revitalization project. A turning point for her career came in 2010 when she participated in the first Social Innovator Koshien contest, which is aimed at discovering, fostering and supporting potential leaders who can deal with challenges of the time. Her presentation at the contest was applauded as she talked about a regional project designed to bring back local consumers – who shop at supermarkets or large retail stores – to traditional mom-and-pop stores by sending discount information via smartphone in the evening, when many people shop for meals.
“This experience helped me realize how important it is to solve social problems,” Katsushima said. “I was also able to build a network of contacts outside DNP. When I became involved in VRM, I sought help from these contacts.” Her urge to give this concept a concrete form prompted Katsushima to reach outside DNP, build strong ties with other companies and get the Japanese government involved in designing the information trust bank. Her efforts resulted in DNP awarding her the rare position of intrapreneur – a company employee assigned to develop a special idea or project like an entrepreneur would.
A pioneer in designing an information trust bank system
Conceptual chart of an information trust bank
Source: Draft of a medium-term report by the Working Group on Data Utilization in the AI and IoT Era, a panel under the Commission on Creating an Environment to Circulate Data.
The concept of an information trust bank was mentioned in the Japan Revitalization Strategy 2016, and conceived in the Basic Act on the Advancement of Public and Private Sector Data Utilization. In fiscal 2017, the term “information trust bank” was incorporated in, among others, Investment for the Future Strategy 2017, which was approved by the Cabinet.
The outline of an information trust bank is as follows (Conceptual chart of an information trust bank, Figure). An individual manages their personal information that has been kept by companies, medical institutions and other entities by using a personal data store or similar system. The person signs a comprehensive agreement with an information trust bank and entrusts it to provide his or her information to a third party. The bank then provides information to companies and organizations it deems appropriate. Circulating data this way means individuals could receive tangible perks such as by redeeming points for rewards from companies that received their data, or indirect advantages such as receiving services that they desire, which are started by companies that analyzed their personal data.
The information trust bank system is scheduled to start in Japan this autumn. The government has compiled draft guidelines on certifying such banks. The guidelines have stringent rules, including a clause requiring such institutions to ensure individuals who disclose their data can trace where this information is distributed. These features are peculiar to Japan and are designed to make sure personal data circulates safely and give individuals peace of mind.
People, who might wonder how their personal data have been circulated when they receive messages from companies they do not recognize, will be able to see instantly a record of which companies have received their personal data and how effectively their data has been used.
Katsushima has had people at DNP who supported her “will” to propagate VRM get involved in designing the information trust bank system.
Their first involvement with the government's efforts came through the Ministry of Economy, Trade and Industry (METI), which anticipated the arrival of an era in which personal data will be circulated in a person-centric way. METI believed the lack of personal data circulation in Japan stemmed from the fact that companies keep such collected data exclusively for their use. As the first step to address this problem in 2014, the ministry established a panel to examine how to streamline Japan's credit card settlement networks. Each credit card company has its own network, which blocks the sharing of such data among businesses. Katsushima was invited to sit on the panel and tasked with spreading the VRM concept.
While the panel was discussing the issue, there was a surge in demand from foreign tourist-related businesses. Katsushima played a key role in devising a VRM scheme so DNP could participate in a ministry demonstration project called “Omotenashi Platform” for tourists visiting Japan. Omotenashi means hospitality in Japanese. The platform, which uses a VRM system DNP developed, allows foreign visitors to manage and disclose their personal data in selecting services they want.
The Cabinet Secretariat's IT Strategic Headquarters praised these accomplishments and invited Katsushima and several other DNP employees to participate in discussions at its panel on data circulation. “I thought if DNP's idea on VRM was adopted by the state, allowing us to get involved in drafting a legal framework and instituting a system, we could develop a market for us later,” she said, underscoring the importance of participating in the government's endeavor.
Furthermore, in July 2018, the Ministry of Internal Affairs and Communications adopted two of DNP's proposals for demonstration projects. One is a next-generation travel agent service to be offered in collaboration with JTB Corp. and other parties, using information trust bank functions; the other is a lifestyle support project conducted with Chubu Electric Power Co., Inc. to send health-related information tailored for local residents. DNP plans to independently carry out two other demonstration projects, on the sharing economy and medical care, with the aim of commercializing such services in the future.
Japan still catching up
“Although some Japanese have caught on to the VRM concept, Japan is still a developing nation on the global stage in terms of circulating personal data,” Katsushima said. The European Union's General Data Protection Regulation took effect in May 2018, giving people more control over their personal data and granting businesses more benefits from a level playing field. Britain and the United States have instituted various measures to protect and use personal data. VRM front-runners Finland and Estonia have each established a human-centric scheme in which people manage their personal data by using a state-assigned identification number.
“The Japanese system is rare in that it does not require a separate agreement for each disclosure, but it allows individuals to entrust an information trust bank to provide their personal data to third parties under a comprehensive agreement,” Katsushima said. “It also grants information traceability to individuals so that the scheme operates safely and with peace of mind. In the future, we might be able to export this scheme to foreign countries.”
Initially, Katsushima had difficulty persuading people within DNP to buy into her VRM business ideas. But, in September 2015, DNP launched a feasibility study by starting “Kirei-Safety,” in which consumers manage their own data and provide necessary data to companies of their choosing. After Katsushima was involved in the Omotenashi Platform scheme and the government's compilation of rules on information trust banks, DNP warmed to VRM business ideas as a promising field. Last year, then DNP President Yoshitoshi Kitajima told Katsushima to pursue VRM business as “a new core business for DNP.”
“Information trust bank business appears totally unrelated to what a printing firm does, which is putting ink on paper,” Katsushima said. “But DNP has been quick to start digitalization and build networks, providing new values by synergizing printing and information technologies. I believe information trust banks will be one important theme in the 'Third Corporate Founding' of DNP, in which the company strives to solve social problems at a time when the business environment is becoming increasingly complex.”
Katsushima's immediate challenge is to spread the ideas behind information trust banks. Most Japanese people know little about managing their personal data, and many companies are reluctant to return personal data to their owners and then share this information with others. “We must find better ways to publicize these ideas, and I believe DNP should lead this endeavor because it is the one that started all this,” Katsushima said.
Katsushima's department, which started with her and one other employee, has been strengthened to a team of more than 20 people. Katsushima plans to focus on training her subordinates, while planning services that can promote data circulation more safely to solve social problems.
“If we pursue our 'will' and make steady efforts, like-minded people will come together to create a huge driving force,” Katsushima said. “I want to show my DNP colleagues having this experience can be possible.”
- * Publication date : October 12, 2018
- * DNP department names, product specifications and other details are correct only at the time of writing. They are subject to change without prior notice.