Quantity or quality of data?
Organizations are flooded with data and surrounded by information at every step of the way. 83% of companies’ seniors consider data to be an asset and 42% see them as having monetization value in the near future. However, as enterprises are inundated with information regardless of their quality, they seem to struggle with its usage in terms of adopting proper technology and allocating the right teams to derive profit from smart data. According to Gary Cokins, President of Analytics-Based Performance Management LLC, the arguments for the lag behind efficient data management are: anxiety of being measured and being held accountable for decisions that are based and backed up by good in quality data. Thus, the question is whether issues behind embracing the change are more behavioural, technological or maybe a combination of both?
Being smarter with smart data
Disregarding the industry, businesses focus their data quality management forces on three main types of data; consumer, product and financial data. Nonetheless, the huge difference lies in usage of data to create value both for customers and company itself. According to Anthemis Group, venture investment and advisory firm, online retailers are most effective in deriving value from constant information flow. For example, consumer transaction behaviour is analysed to make product suggestions, boost customer loyalty and sales. Location data is examined for fraud and security checks or to display offers based on customer’s location. Contextual or real time satisfaction surveying is performed to indicate customer dissatisfaction which is then followed by certain actions to retain those consumers. However, the industry that struggles the most with monetizing the data are financial institutions. Based on Worldwide Semi-annual Big Data and Analytics Spending Guide from IDC, banking sector spent approximately $17 billion on business analytics and big data in 2016. The presumption is that financial institutions lack creativity and entrepreneurial spirit to utilize data in order to offer better products or decrease operating costs. And yet, is there any solution for banks to take advantage from data? One way, is to establish close partnership with fintech companies where banks supply information and fintechs supply analytical tools in order to build powerful infrastructure enabling to generate profit from any kind of data. As, cooperation is already available the challenging question is how clients’ data is protected and why only companies should make profit from using the data?
Does customer have any control over his personal information?
As stated by Virtru, Data Protection platform, data privacy issues stem from increasing spectrum of profitable ways business can track consumer. Vast majority of websites and applications gather and sell consumer data to better understand behaviour and force frequent purchases of customers. While companies have been using innovative solutions to improve collection of clients’ information, data privacy concerns grew in seriousness that raised the debate over who should own and make profit on data.
First of all, organizations aim their attention at securing data from competitors and hackers. Unfortunately, according to Ponemon Institute’s 2017 Cost of Data Breach Study, the average cost of data breach in 2017 amounted to $3.62 million with the average of 191 days to identify that company has been hacked. Another burning concern is increasing rate of adoption of Bring Your Own Device (BYOD) in working environment. Vast majority of BYOD workers are opting for personal applications that have access to their data and can potentially compromise secure business data. Furthermore, badly developed apps can gain access to passwords, email addresses and other sensitive data. To make matter worse, approx. 57% of employees, work from private devices while being on sick leave and another 61% read work emails while being on holiday. The last case worth mentioning, is endless trust of companies in storing all data in data centres. While centralized databases have a wide appeal and widespread usage in case of any failure the amount of data exposed is much bigger than in case of distributed ledger approaches. In 2016, the average total cost of unintended data centre failure accounted for $8,850 per minute. To the most frequent reasons of database breakdown are: human error, cooling failure, cabling problems or security issues.
Will blockchain shake things up?
As both amount and value of data have been increasing overtime the following issues have been raised: who should be the owner of data, who should make profit on them and how to improve their security. All these questions seem to be addressed by distributed ledger technology based on blockchain. Such solution enables efficient and fair relationship between providers and users of data. And as mentioned before, in order to commercially enable decentralised asset ownership driven by peer-to-peer transactions, financial institutions and fintech companies should establish strong partnerships to benefit one another. One of few companies providing complete ecosystem supporting both parties in achieving their goals is Creditor Data Platform (https://creditor.ai/). Its platform is built upon blockchain technology empowering individuals to control, trace, and be rewarded for sharing their data. Individuals are also receiving a reward for providing personal information while businesses are able to mitigate risk against poor in quality data and act according to current regulatory policies concerning data processing and usage. Such ecosystem guarantees fairness and pushes the identity evolution towards a self-sovereign one, while satisfying data buyers needs in terms of data value.
Authored by: Viktor Ihnatiuk (Co-Founder and CEO of Creditor Data Platform) and Anna Matyaszek (Community Manager of Creditor Data Platform)
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