Data privacy, the intelligent use of data and retaining customers’ trust will continue to be one of the biggest challenges that businesses face in 2019 and beyond. The impact data has on our daily lives is continually increasing, with home appliances starting to talk, AI computers beating professional board-game players and machine-learning algorithms diagnosing diseases. This is only the beginning.
With the help of new innovations and industry’s willingness to embrace new developments, the potential for how we use data is vast. The future is not just about analysing data to make predictions, but about using it to give context and explain why something happened. Understanding this opens up a world of opportunity to challenge and disrupt the status quo and help banks and other finance operations excel in what is an increasingly crowded and competitive marketplace.
Focus on insight
Going forward, insight, or causality, will become a key feature in the financial services data world, along with technology, algorithms and architecture. Traditionally in the area of data science and big data there have been a lot of proof-of-concepts (POCs) and siloed implementations. These now need to be turned into scalable solutions and rolled out into production. To do this, and deliver their business visions for the future, organisations will need to develop software-house capabilities within their data operations.
While there is no doubt that the analysis of big data using new techniques such as AI opens up opportunities, it also has significant implications for privacy, data protection and the associated rights of individuals – all things that came to the fore in 2018 with the introduction of the EU’s General Data Protection Regulation (GDPR). These implications arise not only from the volume of the data concerned, but from the ways in which it is generated, the propensity to find new uses for it, the complexity of the processing and the possibility of unexpected consequences for individuals.
Implications for privacy and data protection
Data protection is not simply a legal requirement for dealing with data, it is also prudent and advantageous for other reasons. In addition to encouraging creativity and innovation, it also helps to ensure data quality, something that is becoming ever more critical for businesses and public sector organisations today. This year has mostly been a box-ticking exercise of technical compliance. The important thing for organisations now is to ensure they are clear about the potential benefits of what they are doing with their data and the steps they have taken to address privacy risks. Larger corporations are more likely to be closer to the required standard, but small and medium-sized organisations face larger overheads to reach the high standards now expected by customers.
These standards have proven to be a critical factor for companies in addition to the legislation, as we’ve seen from the recent backlashes against Facebook after the Cambridge Analytica case. Customer expectations have increased considerably, and companies are expected to go a step further and treat their data not just legally, but also responsibly. After all, the fuel propelling the advances in data, including predictive, prescriptive and explanatory analytics, is personal data. Whether it’s details you enter into an online form, the statistics generated by your fitness tracker or your social media postings, it is all being used to help businesses build a picture about what you do, when you do it, and, in the future, why you do it. Without this, the significant progress we are making in analytics would not be possible.
As a result, trust is going to be key in 2019. Implementing basic governance and appropriate procedures to deal with data correctly is no longer enough. Organisations will need to be proactive and seek to build a relationship of trust with their customers. Companies that fail to acknowledge this and focus on the customer, will lag behind their competition.
Security concerns and cyber threats
Finally, along with privacy comes security concerns around safe keeping, storing and cyber threats. The era of big data brings a lot of benefits as we have already explained, but if companies are not able to protect customer data from malicious attacks, any trust they have built with the customer will be immediately eroded. In an environment where digital ethics is becoming an increasingly hot topic, this is something to be avoided.
2019 is set to be a year of innovative technological developments in all areas of business. Given that data touches most of these, it is crucial that those dealing with data embrace the new developments and use them to further their goals. There is no doubt that the enhancements to data use made possible by machine learning and AI pose new challenges, but in the long run the benefits will outweigh these and allow data to remain a buzzword for yet another year.
By Evangelos Tzimopoulos, Senior Manager and Data Specialist, Brickendon
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