Urban AI
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Urban AI

Data Fiduciaries: a sensible governance for smart cities

This contribution was originally written for URBAN AI Report by Philippe Beaudoin, CEO at Waverly and co-founder of Element AI

The development of smarter cities is a project accented with challenges of varying natures, be they social, economic, or technological. An inevitable aspect of these cities, however, is how they will establish their data collection to augment their capabilities of accomplishing their missions for their constituents. This data can be derived naturally from many different places, like cameras, microphones, applications installed on their smartphones, etc. This data, even though it is necessary for municipal improvements, are potentially sensitive and collecting them can affect citizens in a variety of ways. In this context, it is crucial that we ask ourselves questions about data governance mechanisms. Data fiduciaries are mechanisms that, when correctly used, have the potential to give users control over their data again.

Our current technological environment has gotten us used to a model wherein the collection and storage of data is carried out by companies that provide services, which entail a concentration of data in the hands of a small number of very big companies. Due to this, users are now excluded from the decisionmaking process regarding how their personal data is used.

Just like the very public Cambridge Analytica affair illustrated, today’s data can be acquired using online profiling, it can be purchased by third-party providers or even inferenced using aggregated data sets. The complexity and the lack of transparency of the data accessing process makes it practically impossible for users to understand and manage the risks that they are exposed to when they consent to their personal data being used.

On the other hand, when data is collected and managed by service providers, data fiduciaries are an alternative model that has been studied and proposed by a number of international experts in data governance,automated learning, privacy rights and public politics. This is a model wherein a third party provider uses common-trust laws and aims to promote public interest in:

  • Offering citizens more control on their personal data
  • Improving access to data and favoring innovation
  • Fixing asymmetrical power issues between companies, governments and citizens
  • Reinforcing privacy rights and human rights; and
  • Allowing the public to share the value of data and artificial intelligence

What is a data fiduciary?

Concretely, a data fiduciary is a structure that brings together three entities: the constituent, the fiduciary (trustee), and the beneficiary. The constituent is the person that owns or produces the data, the fiduciary is the legal entity that is in charge of the prudent and diligent administration of the data entrusted to them, and the beneficiary is the entity that wishes to use the data, for instance, to provide a service. A data fiduciary should be guided by a contract that clearly defines its goals, the rights and requirements for the data being managed, the decision making process, as well as the necessary aspects for a functional relationship and the creation of a relationship of trust between the fiduciary and the constituant.

To give an example, we can imagine a citizen- the constituent- that wishes to increase the quality of public transportation overall in their city. He or she would accept to transfer their geo-localization data from their mobile phone to a fiduciary that, according to the agreement, would accept to share their data with a private company or an association- the beneficiary- who will develop an application to augment the efficiency of bus services.

One of the primary advantages of this model is in the data sharing and what it can offer constituents. This sharing allows us, for instance, to centralize the administration process of relationships between beneficiaries. Rather than agreeing to the“terms and conditions”- which are often quite vast- of all the service providers, constituents can trust the fiduciary that will act according to the fiduciary agreement, and therefore, in the best interest of the constituents. This mutual sharing also allows them to establish a balance of power between the users and the service providers, which allows for the users to collectively negotiate the use terms for their data.

From theory to practicality

Though they offer a promising governance model for data, putting these data fiduciaries to use can have a few issues, particularly in the context of smart cities. In fact, some of the data collected- for instance images of public spaces taken by cameras- cannot be attributed to a sole constituent. Several technical challenges must also be resolved when it comes to transmission, treatment, security and supervising how the data is to be used. Implementation of pilot data fiduciary projects are essential for us to better understand these differing challenges

Logo of the Open Data Institute

In 2018, the Open Data Institute (ODI) announced a partnership with the office for artificial intelligence for the United Kingdom to pilot three data fiduciary projects that focus on illegal wildlife trade, reducing food waste and improving municipal services.

Today in 2018, Sidewalk Labs, one of the affiliates of Alphabet, offered to create an independent “civic data fiduciary” to help manage the data collected in the case of developing their smart city project in the heart of the city of Toronto. Even though Sidewalk Labs brought attention to the concept of data fiduciaries, their proposal was criticized for lacking details, the fact that it didn’t take into account the community’s opinions and because it did not include any obligations for the fiduciary. The example of Sidewalk Labs clearly illustrates that, if they want to be accepted by the public , this new form of data governance must be correctly implemented.


We must remind ourselves that this isn’t the first time that society successfully created a collection of mechanisms that is able to reduce problems related to the concentration of power. These approaches to democratic regime governance -for instance the separation of power- allowed us to preserve individual rights and promote public good while still offering an environment that catalyzes innovation and economic growth.

The model of a data fiduciary represents a very important first step towards recognition of technologies that are based on the collection of data needs to respect proportional obligations due to the risk that they represent for users.

In fact, this model reflects the current public aspirations when it comes to data governance: fair representation, equal rights, accountability and justice. These characteristics have the potential to create an environment in which smart cities could be socially acceptable and peaceful.

Though data fiduciaries may entail a few implementation problems, they remain undeniably a promising innovation that deserves an important investment.1




Urban AI is a Think Tank which federates a global ecosystem and a multidisciplinary community. Together, we propose ethical modes of governance and sustainable uses of urban Artificial Intelligences

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