Tag Archives: big data

You are on sale at the banks

Last week I looked at a Dutch news bulletin headlining that ING, one of the largest banks in The Netherlands, is exploring ways to sell their customers data to the highest bidders on the free market. BigData analytics is what they call it. Collect humongous amounts of data from everyone, everywhere on everything. Yes, you are on sale in case you didn’t know it. Two of the institutions massively equipped to do this are government agencies and banks. An organization like the ATO (Tax office here Down Under, like IRS in the US) has insight in your entire life regarding your income and overall generic spending, if you’re on welfare or are claiming benefits etc. Government agencies are under much more scrutiny than commercial entities like, for instance, banks. These agencies are not allowed to do anything with your information besides the task they need to do. Banks however have an exponentially bigger insight in your life. They can even closely guess what you had for dinner last night, what your exact income is, how big your bonus was, how much you pay for fuel and which fuel your car uses, how much you paid for your car, size of your mortgage, at which supermarkets you shop, which clothes your wear from which retail stores,  etc etc etc. Basically every purchase you make or transaction shows up on your back account tells something about you and this is what the banks are exploring to sell off.

“Why would they want to do that” you may ask. Your spending habits creates an “interest profile”. This profile tells in general who you are, what you do and what you are likely to buy. This profile is gold for marketing people to target their marketing campaigns and try to convince you to buy their product and not the competitor’s. This is far more effective than putting an ad in the newspaper since they (the marketing departments) have absolutely no clue who’s reading their ads, what the return on their ad investment is.

Lets take an example. You like to go fishing with your son on early Saturday mornings. You fairly regularly buy fishing gear and you pay with your credit or debit card. At that moment in time the banks know you like fishing. So what is related to fishing? Outdoor stuff, fishing boats, specific clothing, fishing holidays and you name it. As soon as you fit into this profile you can expect very targeted ads which can show up anywhere. Even depending on season these ads can be adjusted. If the autumn is around the corner you can expect ads from clothing shops regarding wet-weather gear, on the monthly bank-statements you can expect a footer which shows you that a fishing-trip to whatever location is on sale etc etc.

You may think this is fairly innocent, after all, you don’t look at ads in the newspaper so why would I look ad those. Statistically seen you are more likely to look at ads that fall into your interest profile. Being a computer engineer myself I’m interested n gadgets and developments in my industry and I don’t pay attention to excavators or restaurant furniture. Basically that means that if I see an ad with a fairly high geek level I’m more likely to read it and buy something. If you can keep a good grip on yourself that is no problem. I only buy what I need.

The biggest issue is that the banks now start to act as a commercial broker with you as trade material. I don not only despise this from a commercial perspective (basically they tell you you’ve become a prostitute and they act as the pimp) but also you have absolutely no way of influencing the way your data is used. The banks will tell you that their first interest is in you as a customer and that it is in your best interest but that is total nonsense. ING did the same over here or in a google translated version here. In the privacy paragraph they state (freely translated):

ING will never share personally identifiable customer data to third parties and customers can be confident that ING will only use their personal info in compliance with the law and our business principles.

ie. this will make them search for every loop-hole available in current legislation (and there are many since there is almost no law which deals with this) plus every business principle goes out the door as soon as 1. money can be made,  2. revenue and operating profit are at risk or 3. when shareholders start to complain.

Bankers are good in only one thing and that is making money for 1. The Bank 2. the Executive Board and 3. its shareholders. You are the method of attaining that goal.

The above may raise some eyebrows and you may refute my standpoint by saying “If the banks only map my habits into a profile and just use that profile then my personal details are not used in public so whats the problem?” I’ll tell you:

Snowden !!

The banks are not allowed to use you personal information for commercial purposes. That means they are not allowed to provide a marketeer with a bank-statement of your spendings over the last 3 years where your name, number, address or anything that might be tied to you personally is shown. Depending in which country you live they are tied by many privacy laws which prevent this. The banks have numerous safeguards in place to protect your personal information however, since they use massive computer farms to create these mappings between you, your profile and their marketing customer base (ie the ones they are selling your profiles to), the algorithm used can be reversed to map profiles back to the individual person/account holder. Although access to the algorithm and compute farms will be pretty restricted on a need-to-know basis there will always be a “Snowden” or “Manning” in the house who, if there is enough at stake, will trip over and is tempted to funnel info away via some back-doors. The algorithm and information it provides will become some sort of NOC-list (in case you’ve seen Mission Impossible) which is worth a massive amount of money in the marketing world. If large multinationals can increase their revenue by only 1% on a 100 billion annual turn over, just because they have this information you can imagine what the stakes are.

Green Field

Banks have very tight guidelines and insurance methods to protect your financial assets so if an employee has plundered your savings account the bank is required by law to compensate you and from a personal perspective no harm is done (maybe some embarrassment at the cash-register in the supermarket when your transaction is rejected but that’s it). Things become VERY different when ALL your personal information is out in public and your neighbor can see that you have been paying a substantial amount on speeding and parking fines or you overspent your credit card massively on numerous occasions. There is no way in the world any organization, either public or private, can fix this. Secondly, if your habits are a little less “kosher” and someone is able to figure this out because they were able to trace it back to you, you might, or very likely will, become susceptible to extortion. Any organization that is currently exploring the options is finding themselves in greenfield scenario’s. There are no “best-practices”, laws, guidelines, safe-guarding mechanisms or whatsoever. To me this looks extremely dangerous and I’m not alone. The majority of political parties in The Netherlands are like-minded and now want to impose restrictions of “who can do what with which information” which reaches far beyond the currently privacy laws.

Just Banks??

Now if you think that only banks do this you’re wrong. Obviously the big internet companies like Google, LinkedIn and Facebook do exactly the same. The difference is though that these companies do not have an exact insight in your spending habits. They do have a interest profile on you when you +1 or ‘Like” a certain page. This gets recorded and pretty soon advertisements regarding that topic will appear on your ‘Wall” or in your search results.

Also you might have seen that supermarkets, large retailers, insurance companies, airliners and many more either have, or will team up with credit-card companies. To lure you into this they promise “attractive benefits” in the form of discounts, special sales and exclusive “member” benefits. Don’t be fooled and know that all these companies are now able to track and trace your exact behavior and life-style. Supermarkets are even able to link your nutrition habits to a health map which they then can sell to health-insurance companies. If they see you buy a packet of cigarettes each day you can be pretty sure you get ads and “spontaneous” advice on “quit smoking” courses and nicotine patches but when laws and regulations are not strict enough you may see a significant increase on your health insurance premium or you may be denied an insurance indefinitely.


“So how do I prevent this from happening at all?” you might ask. Well, that depends on where you live and what the policies in your country or state is but there are a couple of options.

  1. You can start by first sending a letter to your bank that you will not allow them to use any information in any form related to any of your interactions with them or their affiliates.
  2. Secondly start hassling your political representatives to spend significant time on this to make sure sufficient legislation will be developed to prevent this from happening. Let them know you are an individual and not a commercial entity which is for sale. 
  3. Spread your account over numerous banks and/or financial institutions use them each independently. (I know major hassle but when thing go haywire you’ll be glad you did)
  4. Use cash. Banks cannot trace cash in the sense they can’t tie it to an individual or organization. That’s why criminals use it. 🙂
  5. Make sure you don’t have a bad credit-rating. All financial institutions have access to some sort of central database where this is registered and even this might be used for marketing purposes. (lawyers and debt-management companies are more than interested)

All this might look like some “Big Brother” episode but be aware, this is all VERY REAL.

The reason why I massively object in banks starting to sell off this kind of information is that, in my view, they provide some sort of “utility function”. Nobody forces me to take a credit-card from a supermarket or take out an airline membership attached to a financial institution but society does require me to have a bank-account. My boss does not drop by with a bucket of cash every month nor do institutions I deal with, like my power and gas provider, phone company etc,  accept cash. If my current bank shows any signs of even exploring the possibility of embarking on a public sale-campaign and trying to sell my info I’m going to look at other banking options right away.


Erwin van Londen