Big Data, Privacy and the Huge Opportunity in the Monetization of Trust
We all know that Big Data has arrived. (Living in the Big Data world, I hear the phrase "Big Data" so much that I now sometimes say that Reputation.com isn't a Big Data company, it's a HUGE Data company.)
But after the arrival of Big Data, then what? The big question is not "Do you have or want Big Data?" or "Does the Big Data idea matter?" Big Data is here whether you are ready or not, and it is forcing structural changes to the way data is collected and used.
The important question now — which is being taken up at several sessions on innovation, privacy, responsibility, and risk here at the Annual Meeting in Davos, is "What are you going to do with your Big Data?"
There are two components to a structural answer to this question.
First, it is imperative to protect the data. In the age of growing cyber attack, the need to safeguard data may seem obvious at first. But in this case, I mean more than protecting information from leakage or hacking. I am talking about the value of making sure your customers' data are not used in ways your customers did not reasonably expect. As has been noted many times before elsewhere, companies in certain industries have fundamentally relied on their users' ignorance for how their data were being exploited. Indeed, many of the companies who sold (or shared or otherwise transferred) data about their users have been, and remain, accidentally ignorant themselves as to where customer information ends up after it departs their own servers. Securing data successfully in the future will require knowledge and transparency - on the part of both end users and the companies that hold their information - as to where the data have been and where they are heading. A structure based on trust and transparency will allow productive new uses of data, which brings me to my second point.
Second, it is necessary to consider how best to use the data once they come into your possession. We can now easily envision a better alignment of interests between companies holding data and the customers and end users whose data they hold. Under the old system, companies that acquired data used it almost entirely for their own benefit, often at the price of consumer dissatisfaction. But, using today's technology, it is possible for a company that holds vast quantities of end user data to mine and monetize it simultaneously for itself and the individual consumer. (Full disclosure: my company, Reputation.com, helps companies and end users [http://www.youtube.com/watch?v=fg1SpUgKTpk in just this way.)
For example, existing technology allows businesses to offer end users discounts, status and even cash in exchange for delimited third-party access to their data. The enterprises that stand to gain most from this type of business model are financial institutions, ISPs and telecommunications companies: they possess huge consumer data sets but have been regulated away from using the data in the same way that media businesses, especially Internet media businesses, are already using data the data every day. These companies can unlock huge value in collaboration with their end users: the companies and consumers together can actually monetize the latent value of their data and even, in some way, of their mutual trust, perhaps through the medium of a trusted privacy intermediary.
The theme of this year's Annual Meeting is The Great Transformation: Shaping New Models. Nothing could more apt than innovation in the field of data, trust, and reputation. This week at Davos, key stakeholders from business and policy are engaging in robust discussion about realizing the promise of this new source of value for businesses and consumers.
This week at Davos, key stakeholders from business and policy are engaging in robust discussion about realizing the promise of this new source of value for businesses and consumers.