Whose data is it anyway?

As technology weaves its way into the lives of folks, we are all beginning to see how the information shared with tech companies can be used to market to us.

Have you ever been talking to a friend about a favorite restaurant only to get Facebook ads for that restaurant hours later? Or maybe you were looking at a bicycle on a sporting goods website, and now you're getting emails about the exact bike you were browsing.

I noticed how pervasive personal data was a few years ago driving back to work from lunch. I had stopped at a light and saw someone driving a Jeep Gladiator. That's the Jeep version of a pickup. Now, I don't remember saying anything about it out loud. I also don't remember getting back to my office to look it up on the internet. I did start getting Twitter ads about the truck. Did the algorithm really know me that well, or did it track mine and the other driver's phones and assume we needed ads for each other's cars?

I magically started receiving ads from a topic I just discussed with my friend. Were Alexa & Siri listening and selling my data in real time?

I don't really know. Your data is out there, and, for those in the FinTech industry, it's a huge commodity. Data is king, but not everyone uses it with the best intentions.

Recently, Plaid, a tech company that links consumer bank accounts to various financial apps and services, settled a $58 million class-action lawsuit. The suit claimed that Plaid "passed on personal banking data to third party firms without user consent." About 98 million people are affected by the settlement, and if they all file a claim, they will get about 60 cents each. Your information and privacy is worth more than that, right?

Others are making billions on your data

As consumer data becomes a bigger and bigger part of our lives, I think users should own their data and even benefit from its use. Facebook recently announced that its advertising revenue rose 56 percent to $28.6 billion. More than 80 percent of Alphabet, Google’s parent company, revenue comes from ads. In the last year, Google ads generated $147 billion for the company! Even a relative newcomer like TikTok grew ad revenue by 500 percent in 2020.

These companies and others can generate this revenue because they can hyper-target ads to specific users on their free services. How did they get that information? Users willingly gave it to them because the conveniences and entertainment value the platforms offer are so enticing that many users are completely unaware of what they have to give up as far as privacy.

Do you know how much your data is worth?

So, where do things go from here? Every day, tech companies are bringing in vast sums of revenue, exploiting the information their users have willingly given up. What if there was a way for the consumers to profit from the usage of their data personally? How much would that data be worth, and what effect would the user having control of that data have on companies like Facebook, Google, Twitter, and the rest?

It’s hard to know for sure, but wouldn’t it be nice to get a piece of the pie in the future? It may be as significant chunk and could be an excellent way to make passive income. The more data you generate, the more income you may get.

Can Banks & Credit Unions come to the rescue?

Banks and credit unions need to work harder to educate their customers and members on what their partner services will do with their information. This can be tough, though. Not all consumers read the fine print on their EULA. Okay, they probably don't even read the giant, bold print on it either, but that doesn't mean that financial institutions can't be more proactive regarding terms and conditions. Make those documents easy to find and accessible to anyone who needs them.

Another issue is that community financial institutions are at a severe disadvantage regarding the consumer data they have. The big names in tech already have huge stores of consumer data and they also have their sights set on the financial sector. In fact, some of the information and access that those big companies have is downright scary! Partnerships with companies like Plaid are important to community banks. The connections they can help banks and credit unions build helps put them on the same footing as the big tech companies.

See the value in yours and consumers’ data

Banks and credit unions that partner with financial data companies must keep track of what they are doing with customer data. They should also call their partners out when they are abusing or misusing the information. Remember, this breach wasn't some bad guy who broke through a firewall to steal customer data. It was a breach in the trust between Plaid, consumers, and their banks.

It's imperative that banks and credit unions only use customer information ethically to benefit consumers, not financial institutions themselves. Give consumers the power to know what information is being used and the comfort that their data is in good hands. Treat their data like you would want your data treated. After all, if they can't trust you with their email address, how can they trust you with their financial future?

Lastly, financial institutions need to ensure that customers see and understand just how much their data is worth and monetize that information. To be effective, banks and credit unions need to find the actual value in the data they have in their networks.

To find out how BOND.AI can help discover your bank or credit union's data potential and how much it is worth for your consumers, click the button below.