In the past month, more than half a million Americans had their personal identity details stolen from two specialist information brokers, LexisNexis and Choicepoint.

These huge thefts triggered a wave of public concern and a responding wave of law reform proposals across the United States.

Australasia’s data provider firms, including Baycorp Advantage, have much stricter controls and privacy legislation which mitigate against similar data theft here.

But while those protections mean we can avoid the knee-jerk response of the United States , it doesn’t mean we should not take heed of the lessons they are so painfully learning.

There is now no turning back from the information age to the era of paper ledgers. We must develop better ways to manage the opportunities and risks that the sheer volume of data now being stored presents.

In Australia , data storage is doubling every 12 – 14 months. In two years’ time, Australia will be storing 176,000 terabytes of data, up from 36,000 in 2003. One terabyte of data is equal to 1000 copies of the Encyclopaedia Britannica or 500 million pages of A4 type. Some of this is depersonalised – MP3 files, timetables, archived newspapers and books. But much of it is not.

We live in a world where everything – financial products, health records, plane tickets, your next date, even your identity – now exists at least as much in their digital as their physical form, and where your biographical identity is the key to social and economic participation.

In this world we need to find a better balance between the free circulation of information and speech - or freedom of information - and anonymity - or freedom of identity.

What we don’t need are some of the suggestions floating around the US , such as banning or encumbering the emerging specialist information brokers like LexisNexis. That would be rather like closing the bank instead of catching the robber.

Banks evolved as custodians of value – a relatively safe means for individuals to hold money in its various forms, and to share the cost and risk of that security.

In our modern world, digital information is fast becoming a similar source of value and the development of modern economies requires the development of “information custodians” – organisations specialising in holding and managing sensitive data.

Just as best practice in the operation, governance and regulation of banks has evolved over many decades, the models for governance and regulation of data specialists will need to evolve.

There will be inevitable trial and error as we as a society debate the balance between freedom of information and freedom of identity.  As in the banking world, regulation can only ever provide part of the answer.

The US is now awash with proposals from legislators for tighter controls – many of which are much needed.

But in Australasia, with our already strict privacy controls, it is up to business and consumers to take control of their information.

Business can help by placing a premium on winning and holding the trust of consumers. Assisting individual consumers to make complaints and exercise their rights is a good start, but it is no longer enough. We can supplement individual rights by recognising the consumer interest in data quality, accuracy and security, and by having consumer organisations represent that interest in our industry and company forums.

Specialist data processors like Baycorp Advantage have a higher social responsibility. As the information economy develops, we are seeking ways for consumers to get closer to the data we hold on them. In future it might be possible to build relationships of value directly with consumers themselves.

Consumers can help by checking their own data. Baycorp Advantage provides consumers free access to consumer credit data we hold. Yet of 14 million Australians who have records, only 200,000 check those records every year. Checking their own data will help consumers pick up inaccuracies, and worse, identity theft.

There is still a role for legislators. Reform to privacy laws in coming years should recognise the growing role of specialist data providers. We need to regulate such entities sensibly, shifting from a fearful, prescriptive regulation, to one which is technologically neutral and assists the development of our economy.

But rather than depend on parliaments to do all the heavy lifting, business and consumers can make a start themselves. The pay-off for business? Winning and keeping the trust of consumers, and the right to grow and prosper. And by getting involved, checking their credit file and actively managing their data, consumers will know that their most important asset, their identity, remains as secure as possible.

Consumers can access a copy of their credit file by visiting www.mycreditfile.co.nz or www.mycreditfile.com.au .