WHY DATA EXCHANGE SYSTEMS MATTER

What is safe and inclusive data exchange?

Safe data exchange systems that bring benefits for all are digital systems and processes that allow digital data to be shared and managed in a rights-based, standardized, interoperable, secure, responsible and privacy-preserving manner. They enable public entities to manage data-sharing within the public sector, between public and private entities, civil society organizations, and across borders. They also encourage individuals to access, manage and exercise control over their personal data held by public sector institutions, as well as other partners of the data exchange.  

Crucially, safe and inclusive data exchanges reduce the risks of privacy breaches, cyber threats and the misuse of personal information, all of which can compromise not only digital safety but also physical and social wellbeing. Without safeguards, data exchanges can expose people to harm; when well designed, they help ensure that people feel safe—and are safe—when interacting with digital services. Data exchange systems are increasingly underpinning public service delivery and supporting broader DPI efforts across health, education and social protection. These systems must be designed to ensure no one is left behind. Without a focus on safety and inclusion, these systems risk reinforcing inequality, eroding trust and excluding those most in need. Embedding safeguards throughout the lifecycle of data exchange systems can advance safety and inclusion at every stage, building public trust and enabling fair access to digital services.    

The goal of these systems is to enable the deployment of various digital applications and services at scale. Safe and inclusive data exchange systems promote trust and equitable development, advance gender equality, protect rights, empower people to make informed choices and create an enabling environment that fosters openness, transparency and accountability in institutions.

Why is the governance of data exchange systems important?

Many governments have advanced along their digital transformation journey and have been digitalizing administration, processes, services and information to deliver development outcomes that serve the public good.   

This momentum is particularly visible in low- or middle-income countries (LMICs), where levels of e-government services have increased by 57 percent between 2018 and 2020. A key driver of this progress has been the push to provide digital services for everyday needs such as business registration, public utility payments or applying for birth certificates. Within this pathway, clear trends are emerging:

  • increasing use of micro-service architectures: for example, in legal ID systems, different microservices independently handle tasks such as identity verification, authentication, digital signatures and user profile management.
  • greater adoption of open-source technology including digital public goods (DPG); and
  • growing interest in new innovations, such as digital wallets. 

However, realizing the full potential of this digital transformation remains a challenge. Digital transformation is often fragmented: data in areas such as health, education and welfare are often siloed and stored within individual ministries and departments.  Digital transformation also carries broader societal risks: systems and data can be hacked, resulting in data breaches and privacy harm. Further, there are challenges of data biases, data misuse and digital divides which have wide-reaching implications and an impact on institutional trust and legitimacy.   

Aligned with the Universal DPI Safeguards principles, data exchanges can address these challenges by breaking up silos and addressing data risks. Although data has been described as the ‘new oil’, unlike oil, the value of data for the public good lies not in its raw state, but in its reuse, for example by using de-identified health records to track disease outbreaks or by repurposing environmental data to develop early warning systems for floods. Data exchange enables public value data to be securely shared and repeatedly used among authorized parties. As such, the governance of these data exchange systems is critical.  

Developing strong data exchange governance frameworks helps governments to:  

Maintain purpose

Collaborative, inclusive, polycentric governance is the mechanism through which multistakeholder processes can generate consensus, trust and shared commitment for the common good.  Governance assessments bring stakeholders together (civil society, state, market) to define 'public value’ (Eaves & Mazzucato, 2024) and ensure that data exchange systems are fit for purpose.

Mitigate risk

Technologies and systems move faster than laws and regulations, and this can result in people being left behind. Anticipating and mitigating emerging risks requires adaptable and responsive governance. Multistakeholder, gender-responsive frameworks help ensure risks to all groups are managed and mitigated—across society, government and the private sector. Governance assessments help manage responsibility, risk and accountability of institutions and systems.