How Can Big Data Create Insight Without Scaring Your Customers?

October 25, 2022  |  Mark Hillary

Big Data and real-time data analytics are potentially a game changer for many companies. The ability to see customer behavior in real-time and to analyze historic transactions and browsing behavior creates opportunities to customize how customers see your brand and to create a far more personal experience.

But to create insight and special offers focused on individual customers requires a lot of data. Brands need to know who each individual customer is, where they are, what they like buying, and they will maybe even correlate all this information with external data – such as does this customer buy more frequently when the sun is shining?

This is also concerning to some customers. They are concerned that with so much data, companies can misuse insights and spam them with constant offers or their information can be leaked to other organizations.

In the US, Pew Research found that 79% of people are very or somewhat concerned about how companies are using their data. The same doubts apply to the government in 64% of people – lower but still two thirds of the population worried about how their data is being used.

Most people accept that it is now very difficult to live without companies gathering and using our data – even if it is as simple as our purchase history or what we are looking at online. To completely hide all our activities is often very difficult, or even impossible. So there is a big question for companies that are deploying Big Data solutions. How do you guarantee to protect customer data so that it remains an asset you can use, rather than a liability that just creates more problems?

There are already data protection laws and regulations. The best known is the European GDPR which has a wide array of rules to protect customers and companies are taking it seriously. Major brands such as Amazon, WhatsApp, Google, Facebook, TIM, and H&M have all received large fines for breaching the regulation. These high profile fines make it clear to smaller companies that the guidelines must be followed.

The real issue is that people can be identified from anonymous data. Only a few variables need to be focused on in most cases to identify and name individual customers, so even if your customer data is encrypted and anonymized then are you still doing enough to ensure privacy?

Writing recently in the business magazine Forbes, Dr. Ken Knapton, CIO at Progrexion, said: “For too long, the sentiment has been that companies can analyze any information that they have been able to gather. It is time for data scientists to help their organizations change their thought processes around personal data. In the famous words of the fictional Dr. Ian Malcom, portrayed by Jeff Goldblum in Jurassic Park, ‘Your scientists were so preoccupied with whether or not they could that they didn’t stop to think if they should.’ It is time for our data scientists to stop and think about whether they should.”

This is the big question for Big Data today. Just because something is possible does not mean that we should always do it. Sometimes the risks are too great, although the opportunities are still out there for companies that think carefully about the best way to offer personalization without causing customer concerns.

Banking is an industry that has always been filled with data. We have already written about why Big Data in banking is set to explode. Moreover, the COVID-19 coronavirus pandemic has offered data analysts some great opportunities to study Big Data trends across the world. Read more about Big Data in a time of pandemic.

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