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Executive summary: Personal Information Management Services: An analysis of an emerging market

Posted on: Monday 28th of July 2014

A new market is emerging for Personal Information Management Services (PIMS) – services that help individuals gather, manage and use information (including personal information) to make better decisions and manage their lives better.

Ctrl-Shift finds that a mature market for PIMS will be worth £16.5 billion, making up 1.2% of the UK economy: with a larger total income than the automotive (0.7%) and pharmaceutical industries (0.97%).

Key findings

1. PIMS extend and deepen already pervasive digital disruption

PIMS are emerging as a critical and overlooked element of the 3rd industrial revolution that is slashing the costs of collecting, storing, analysing and distributing digital information.

2. A new market is forming

PIMS fill value gaps left unaddressed by traditional industrial age business models. In particular, they provide individuals with the ability to:

  • gather, store, manage, use and share their own data under their own control (personal data management services);
  • make better life and purchasing decisions (decision support services); and
  • manage information-intensive aspects of their lives better e.g. planning, organising, coordinating, integrating and administering life tasks and processes such as ‘manage my money’ or ‘move home’ (life management services).

PIMS are different to today’s organisations and social media – they:

  • Enable a step-change in trust by giving individuals control over their own data;
  • Make the individual the point of integration of data about themselves;
  • Help individuals to manage their relationships with many suppliers (rather than helping organisations manage relationships with their many customers);
  • Help individuals specify their wants and needs, and making this available to suppliers in the marketplace.

3. The business impact of PIMS will be far-reaching

PIMS present significant opportunities for brands, particularly in:

  • Marketing: Access to richer, more rounded and up-to-date data about customers improves relevance and targeting.
  • Products and innovation: Richer customer insight from new data sets and individuals’ volunteered information opens opportunities to develop new information services and inform product/service development.
  • Customer contact: Access to new and potentially more efficient channels enables organisations to better reach, communicate with and sell to consumers.
  • Risk and compliance: Compliance risk and cost can be reduced by enabling permissioned, trust-based data sharing.

However PIMS also present new risks, including:

  • Customer churn and margins: Price and margin pressures may intensify and churn may increase as PIMS provide increased transparency and easier price, product and service comparisons.
  • Disintermediation: PIMS may insert themselves into existing relationships between brands and their customers.
  • Commoditisation: PIMS may subsume existing products and services into bigger, broader solutions.
  • Customer visibility: PIMS may help customers ‘go dark’ on brands they do not trust or do not want to do business with.

They also have significant implications for existing customer-facing intermediaries and 3rd party services.

  • New intermediary competitors: PIMS represent a competitive threat to existing intermediaries e.g. retailers acting as distribution channels for suppliers, media owners acting as communication channels and brokers acting as sales channels.
  • Disrupted 3rd parties: By creating new sources of rich, permissioned customer data PIMS displace some services provided by advertising agencies, data brokers, credit reference agencies, CRM software vendors, loyalty scheme operators and market research companies.

4. The impacts from PIMS will vary by sector

PIMS’ impacts will be felt differently across the sectors, for example in:

  • Financial services and energy: new threat of disintermediation; an opportunity to offer new levels of customer value.
  • Retailing and motor industries: ability for many to build direct relationships with customers for the first time; increasing price transparency, risk of margin pressure and customer churn.
  • Telecoms: leveraging their vast data assets; finding trusted ways to use this data to provide information service to their customers.
  • Health and government: an opportunity to shift to digital customer experience; radical process and cost transformation.

5. Together, PIMS represent a significant economic impact

PIMS’ main economic contribution is to help drive a progressive reduction in the many layers of today’s economic waste by:

  • matching supply to demand (knowing exactly what to supply and how much of it to supply when and where)
  • connecting buyers and sellers (all the searching, navigating, communication, negotiation and other tasks that result in transactions).

PIMS help reduce guesswork and waste at every level of production, distribution and communication.

In a mature market, the combination of personal data management services, life management services and decision support services could create a new market of £16.5 billion.

What does this mean?

The market for PIMS is evolving rapidly. Ctrl-Shift’s market monitoring is identifying one new service launched every week.

These new market entrants are exploring a ‘gap in the market’ by creating new layers of value for customers, organisations and society. This research confirms there is a significant ‘market in the gap’.

Whether organisations benefit or are harmed by the rise of this new market depends largely on the nature and timing of their response.

Broadly speaking, customer-facing brands have three core options:

  • adopt PIMS as new channels, enabling new ways to engage with customers;
  • compete by offering their own PIMS services; or
  • combat them, refusing to do business with them.

The most risky response is to ignore the new market until it is too late.

The full report is available to download for free: Personal Information Management Services: An analysis of an emerging market.

The research is funded by Aimia, Henderson Global Investors, Nesta, Open Identity Exchange and Vodafone.

 

 

An infographic illustrating what PIMS are and how much they will be worth can be viewed here.