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January 14, 2011


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Jonathan Charley

An organisation that does systematically mine data is Tesco. The Clubcard is used to suck in lots of data from which all kinds of inferences can be drawn about the person, their lifestyle and their desires. This wealth of data will be used by Tesco when Tesco Bank is launched formally launched this summer, so then we will truly see a player in banking using customer information as a competitive weapon.

Jacques Bayens

Wouldn't this make the world an even worse place ?

Chris Skinner

It may Jacques ... but is inevitable I think.

Jacques Bayens

I was getting the feeling that you were impatient to see the development of these "semantic marketing programs". Inevitable ? I didn't realize you were such a fatalist. As voting citizens, we could absolutely make it illegal to spy on our data for purposes we do not approve of, such as tricking us into buying financial products we do not need, or destroying whatever remains of the idea formerly known as "privacy".

Chris Skinner

Hey Jacques

It's a two-way street.

Information is being used actively as a competitive weapon, for example by Tesco as Jonathan points out.

In return, consumers allow their lives to be data mined in order to get offers.

Only the very few 'activists' who go off network, are unbanked, use no technology and avoid any loyalty programs, pay for everything in cash and demand to be paid in cash, etc, could achieve 'privacy'.

For the rest of us, we don't really care. Just look at what folks post on Facebook ....

Mike Gibbard

@Jacques: Interesting use of the phrase "our data". Is it? It may be data *about us* but does that make it "our data"? If we purchase an item using a credit card then the item is ours. But the data that is used to verify and settle the transaction, who owns that: the card company? Certainly; the Banks? Probably; us? Nah!

Jacques Bayens

Chris, privacy is not something you either have or don't have; it's a question of degree. Mankind has gone just recently from almost no privacy to decent privacy, and only in the most enlightened nations. And yet, through lack of education and historical perspective on the consequences, people are giving it all away bits by bits. They do no seem to realize what Hitler could have done with a "Jews database" extracted from Facebook. Or how the authoritarian regimes of the 20th century collected and used data against their own people. Were Zamyatin, Orwell, Huxley already forgotten ? Banks do not have such dark intentions, however remember how easily all this data can be subpoenaed by a government and then correlated with all other sources to find out essentially everything about you. Are you taking the chance for a few sales coupons ? Faust sold his soul to the devil, will you be giving yours away for free ? :-)

Chris Skinner


Deep ... very deep.
Will blog a bit more about this.

Jacques Bayens

@Mike: you make a good point, it is very hard to define "ownership" of data; as far as I know, privacy laws do not even use that concept as such. By "our data", I meant "any data about ourselves that we expect to remain private, or sometimes shared with another party for a specific, legitimate purpose that we consented to". In your example, I do not believe it is possible or practical to define who "owns" the transaction data: it involves multiple parties in different roles. However it is possible to specify which party may do what with this data, how long it should/could be retained, when it should expire, how errors in its contents may be fixed, etc.
Note that the consent part is complex: nowadays, it is trivial for the likes of Facebook to get people to consent to almost anything, simply because they have extremely limited understanding of the consequences. These consequences cannot be fully foreseen anyway, which is why the concept of prudence exists...

Jacques Bayens

Coincidentally... http://nakedsecurity.sophos.com/2011/01/16/rogue-facebook-apps-access-your-home-address-mobile-phone-number/

Mike Gibbard

Jacques, you're right, of course. I recently purchased a trivial piece of equipment from Currys and was asked, at the checkout, for my address and postcode. I supplied it, of course, as I was in a hurry. However, thinking about this (seemingly innocuous) event does, perhaps, illustrate how promiscuous we've become with "our data" (data about ourselves).

Do I really care that a retailer knows where I live? Maybe not, but if that piece of data gets transferred to "the cloud" - as businesses are being encouraged to do - then I, for one, won't know who will have access to that data. I'll trust that the custodians of my data will have thought through the consequences of dumping terrabytes of customer data (mine included) on a server farm owned and managed (almost certainly) by an American corporation who will, with minimal hesitation, grant access to any US government agency that requests it in the name of 'national security'? More to the point, they won't even ask me!

@Chris - we don't care about 'privacy' because, so far, we haven't been *made* to care - like some unfortunate Facebook users have (http://news.cnet.com/8301-17852_3-20028656-71.html) As a developer, I understand the potential for deep data mining is, frankly, tremendous. I just hope that the techies at the big banks and retailers give as much thought to what they *should* be doing with the technology as to what they *could* do!


BankSimple is a data-driven business model that uses technology to provide a better service to customers. The "Zappo's of banking..." But you know that already. ;)

David Hodgkinson

Jacques - it is inevitable but in my experience as long as a) there is genuinely something in it for the consumer (eg timely, relevant offers and improved customer service) and b) there is a genuine mechanism for opting out, then it can be called 'progress'.
The fundamental issue here - and I think Chris touches on this in the blog post - is a philosophical one about how banks use data. The old, narrow, cynical approaches will not work. A genuinely new approach based on using data and analytics to:
a) Provide genuinely helpful financial advice to customers based on their real situation and their real goals (not the narrow sales goals of the bank)
b) Provide outstanding customer service - eg we've noticed that you could get a better rate of interest through transferring to a different savings product, shall we do that for you?
c) Provide well targeted offers/rewards that use my data and your analytics to our mutual advantage
d) Paradoxically, augment big data usage with the return of an element of personal relationships and judgement. This is what might re-invigorate the branch networks.

would provide a genuinely differentiated banking model that could be really successful.

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