According to a recent CIO.com article, What you like on Facebook Could Reveal More Than You Think, the threatening powers of the all-knowing Facebook continue to evoke privacy fears which could be “hampering technological and economic progress.” This article refers to a new study conducted by the University of Cambridge in the U.K. This study is Big Data in disguise – gathering a statistical sample of seemingly meaningless data, both structured and unstructured, then applying an algorithm to predict revealing information about users. This approach is already being used in the Financial Services industry and other industries, through the use of Big Data technologies, processes and data scientists.
In the Financial Services industry, the mobile channel is enabling customers to bank anytime and anywhere, while banks gather even more data about its customers. By capturing every aspect of a customer’s banking behavior, banks will be able to predict if and when a customer will apply for a car or student loan or refinance a house. Banks can then tailor their outreach and marketing communication for each individual customer and deliver the message via the mobile device. For instance, a customer running multiple transactions at a car repair shop exceeding $1,000 within a two-month period may prompt the bank to send a mobile message to the customer regarding the bank’s competitive rates on car loans. Subtle, yet timely and effective.
Privacy concerns are serious but it is a topic that the media loves to dramatize to instill consumer fear. For example, this article starts off stating that mere “Likes” alone will accurately reveal a user’s “race, age, IQ, sexuality, personality, substance use and political views.” Taking a Big Data approach, the study gathered additional user data such as demographic profiles and personality tests, and then applied an algorithm to match “Likes” with user profiles. Therefore, “Likes” alone is not the sole predictor, but rather, it is the combination of a wide array of digital actions and volume of data provided by users.
For the most part, consumers, including Facebook users, are freely providing information about themselves. When this information leads to unintended consequences, good or bad, a tension between privacy and personalized service is created. The moment a customer receives an unsolicited mobile message on car loans from his bank, after burning money on his ‘87 Chevy, he may feel unnerved that he is being spied on or he may feel delighted at the timeliness of the personalized message. Whether personalized service equates to a breach of privacy is in the eye of the beholder, so for now, banks should find opportunities to test the market and “know their customers” through Big Data. The use of Big Data has and will continue to advance technological and economic progress.
-Alexa Choi (firstname.lastname@example.org)