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Tuesday, 20 January 2015

Big data, data ownership and data privacy

When I was a teenager, shops were usually run by a single person and that person was aware of the reason of your visit and capable of advising you anything else. Nowadays it's called Customer Relationship Management (CRM). I also recall that my father sometimes got a call from the local banker informing him which property would soon be up for sale. Times have changed since.

The size of companies, the volume of transactions, the need of servicing clients, the state of technology, in combination with the relevant regulations, create lots of opportunities and risks.

Early March 2014 ING Bank Netherlands announced that they were planning to sell customer transactional data to other companies for commercial use. This announcement caused a national uproar and the plan was swiftly withdrawn.

The uproar was about data privacy while the debate should actually have been about data ownership. Data privacy is a rather useless concept as nothing would work if data are strictly private. We need to accept that some data are in the public domain especially as we put them there ourselves in most cases. Just think of Facebook, Google+, LinkedIn, any other social networking site - or this blog.

The real issue at stake is who owns data? Could ING Bank just sell customer transactional data to any other interested commercial party? Clearly ING Bank's alleged ownership of customer transactional data was genuinely disputed as privacy issues rarely cause such an outrage.

Customer transactional data are already widely used by companies to advise their - and not other - customers on other goods and services. It has always been that way in sales. Nothing new at all. Customers - either consciously or subconsciously - know and fully accept this.

Selling public customer and company data to other companies is also an accepted business conduct since long (e.g., Dun & Bradstreet).

Selling private customer transactional data to other companies is new. These data have never been in the public domain. The legal ownership of such data is far from clear. You cannot not sell what isn't yours in the first place. That would be a clear violation of law.

The way forward is an entirely different concept. Rather than keep on pushing data privacy laws, we should have a law on data ownership. Customers must own their own - permanent and transactional - data. Any company or business must offer an annual compensation to its clients before being allowed to sell such data to third parties. Customers may decline any use or allow detailed partial or full use. The more interesting a customer is, the higher the annual compensation will become.

A data ownership concept matches the interests of people. Data privacy is just an academic topic.