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DEPA, Data Empowerment and Protection Architecture

How is DEPA transforming India’s Financial Landscape?

The Data Empowerment and Protection Architecture(DEPA) is a consent-based data-sharing framework created by NITI Ayog.

Exponential growth in smartphones and reduction in internet bandwidth has generated tremendous individual data. This data encompasses both structured data and unstructured data. Structured data includes financial information, taxation, business, utilities, and unstructured data such as social media usage, mobile data, etc. The data influx has given new dimensions to data-usage for various business use cases, from lending to personal finance management. Emerging wide usage of data is the reason why data has been termed as new Oil.

But in actual terms, Data is more than Oil. Two broad factors make data more powerful and valuable than Oil:

NITI Aayog has recently released the DEPA framework with principles for data protection and architectural guidelines. It manages consent for purpose of empowerment & usage of data. DEPA is an evolvable and agile framework for good data governance alongwith introducing new institution types, and cutting edge technological building blocks to enable true data empowerment.

We look into the critical areas where DEPA will have the potential to make a large impact rather than trying to provide an overview on guidelines and principles.

Before we look into impact, it is important to understand the basic premise of DEPA, Consent Artefact, which provides the backbone to the entire DEPA framework.

The diagram below depicts the consent artifact to manage individual consents to share data with third parties to render services to individuals.

Interoperable, secure, and privacy-preserving digital framework for data sharing

Apart from Consent Artefact, DEPA provides three core Technology foundations to build technology infrastructure to manage data protection and support complete data governance.

The Digital Fifth’s View on the Effects of DEPA

Open Banking: DEPA to give big Boost

RBI had already issued a Master Directive creating Consent Managers in the financial sector to be known as Account Aggregators (AAs), and few AAs have already received in-principle regulatory licenses. The non-profit collective of Account Aggregators – the DigiSahamati Foundation (known as ‘Sahamati’) – is already mobilizing support to exist financial institutions to adopt the technical standards. AA is expected to provide big momentum to open data and transition India a major player in Open Banking space.

Also, Open Banking is all about making individual financial and banking data available to third parties to create value for customers. One of the classic use cases within Open Banking is about the amalgamation of banking and accounting data. If banks and accounting firms exchange individual banking data and their accounting data based on consent, it could create massive value for customers.

DEPA will enable Fintechs and Banks to work on all kinds of Individual financial and personal data securely and seamlessly for Open Banking use cases.

Compliance enablement for Data Protection Bill

With the Personal Data protection bill round the corner, we expect that this will put huge pressure on companies to comply with the requirements of the PDP bill.

DEPA makes it easy for companies to implement controls to ensure data privacy as well as security. Consent Artefacts on ORGANS principle adopts guiding principle of consent requirements of PDP bill including Free, Informed, Clear, Specific and Capable of being withdrawn. Therefore, DEPA has the potential to fast track compliance requirements of the bill while making companies use the potential of data.

Future of DEPA

It is too early to suggest the impact of DEPA on the next phase of digital transformation. However, it will surely push for the realignment of business & technology models to adapt to DEPA requirements.

Realignment may not be limited to individual companies but at the industry level. We could see some startups working in data space to re-bundle their stack & business strategy.

Business models would evolve around the technical layer to maximize the use of digital data of individuals and SMEs.

The Choice of plenty may play a role to drive the next phase of innovation.

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