Consumer data is a precious commodity, digital oil, providing the power behind digital services in personalisation, online advertising and the prevention of online fraud. But who are the organisations sitting behind this boom, how do they work and what controls do we have as consumers to ensure that our data is used only for purposes that we are happy with?
As digital transactions continue to make up an increasing share of the global economy, the usage and value of our data is increasing exponentially. If you’ve ever received a digital or offline direct advertising and noticed that it’s eerily relevant to your interests, behaviour or the content that you consume, it almost certainly didn’t happen purely by chance. Far more likely is that it’s based on insights and data about you that the service provider or advertiser sourced from a multitude of available data sources.
But what are these sources, and how is your data collected, stored and processed? This is a topic that is often opaque at best for the average person.
The Data Brokers
Driving the access to this data are a network of more than 4,000 global ‘Data Brokers’ who collectively gather and analyse huge quantities of consumer data globally. Bur who are they, and how do they work?
From large international names such as Experian, Equifax, Acxiom and TransUnion, to a very long tail of much smaller organisations, data brokers work with global companies to collect data points for us all (some databases hold up to 300 data points per person) across a huge international footprint. A huge number of organisations gathering an enormous quantity of data, creating the power behind digital services.
What is less well known is the heritage of this industry. The General Data Protection Regulation (GDPR), and a string of well-publicised recent cyber data breaches, has recently cast the spotlight onto this industry, but it is by no means new. From 1826, when Experian was formed by London traders exchanging the names of debtors, through the selling of comprehensive lists of creditworthy customers, to the collection of data during the consumer credit boom of the 1950’s and beyond, data has become a core driver behind customer targeting and revenue optimisation.
Sources of Data
Into the 21st century and the consumer data industry has multiplied in scale exponentially, driven by the relentless march towards online in our business, personal and social lives. Accelerated by the 2020 COVID pandemic, this has led to an explosion in the number and volume of data attributes available, and most of these are from either Government sources, public databases or held and made available by commercial enterprises.
Government data is made up of publicly-available, commonly-used data sets such as census, social security or business registrations or births and deaths information, In addition, Government departments make available richer data sets such as tax, vehicle licencing, mortgage and property records, accessible publicly or through managed B2B access mechanisms.
Public data is ‘scaped’ from publicly-available websites and social networks by an army of automated bots, and then stored for use in data services. This may be with the consent of the owner of the data (through the website’s T&Cs), but in many cases it will not.
Provision of commercial data is becoming a major industry, enabling enterprises to log and process millions of user activity and transaction details and, with the consent of the user, monetise these by selling them directly to clients, or to the data brokers.
Management and Control
The GDPR and other regulations are a response to the proliferation of available data attributes and the lack of control and responsibility shown by many organisations in using the data responsibly and protecting the consumer – the owner of the data.
The volume, speed of transfer and scope of the available data can surprise even the most aware consumers, and it is key that the control of data – to ensure that consent is secured, that data is held securely and with rules around where it can be stored and processed, and that the owner of the data has overall control over how it is used – is acknowledged by all parties as the primary factor in the management of personal data attributes.
Questions remain around how data is being used, the impact of the data industry on personal privacy and value generation and on how regulators are controlling how data is collected and monetised. Nearly 200 years after Experian began using data for commercial purposes, the Data Brokers and the industry around them are still pushing to optimise the data opportunity and make it truly the power behind digital services, while international Governments work to define regulations and ensure compliance in a rapidly changing world. Perhaps this is just the start?
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