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Saturday, 14 February 2015

Big Brother, Big Data and the Presumption of Innocence

Gresham's law is an economic principle that states: "When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation." It is commonly stated as: "Bad money drives out good". Source: Wikipedia.

Several parties are very interested in reshaping the retail banking market: Apple Pay, Bitcoin, Google Wallet, Telecom operators, and no doubt several others of which I haven't even heard yet. These parties are interested in the same data that ING Bank was considering selling to third parties: consumer banking transaction data.

I believe that most of these parties have no interest at all in becoming a retail bank. Their only interest is becoming an integral part of a consumer payment transaction in order to compile and aggregate consumer banking transaction data. Apps like Apple Pay and Google Wallet will ensure that such consumer banking transaction data will become personalised rather than anonymous.

In 2014, Cambridge University built a computer model that could tell, with 60% accuracy - based only on a person’s Facebook “likes” - whether their parents divorced before they were 21. It could also tell, with 88% accuracy, whether a man was gay. The model was based on people’s Facebook likes, as well as their friends’ comments and tags. And it doesn’t only work for people who overshare on Facebook. "Often, the less active you are, the more informative is what you do.” The study underscores the power that computer models have in finding patterns where humans can’t. Source: PBS, Frontline, Sarah Childress, The future of digital marketing is you.

Analysing consumer behaviour and building predictive models is the future of digital marketing. Apple and Google already know where we are at each moment of the day through the apps we have installed in our smart phones. Combining location with consumer (payment) behaviour would lead to personalised offers from stores within a close proximity. The Google Now functionality is already an interesting experiment as it even activates your smartphone by sending warnings / notifications based upon your next agenda appointment and current traffic conditions. It also tracks your whereabouts and attempts to translate that into additional information (e.g., home and work locations).

We're entering the age of Skinnerian Marketing. Future applications making use of big data, location, maps, tracking of a browser's interests, and data streams coming from mobile and wearable devices, promise to usher in the era of unprecedented power in the hands of marketers, who are no longer merely appealing to our innate desires, but programming our behaviours. Source: the Atlantic.

The combination of our web browsing activities, our personal information, our social media behaviour (e.g., FB or Google+ likes, comments, tags, tweets), our payment behaviour and our location would enable computer models to predict not only our next purchase but also our potential, likely, probable or actual violations (e.g., civil, criminal, terrorist, traffic).

Steven Spielberg's movie Minority Report (2002) shows how Big Brother and Big Data could turn out. In the year 2054 crime is virtually eliminated from Washington D.C. thanks to an elite law enforcing squad called "Pre-Crime". They use three gifted humans (called "Pre-Cogs") with special powers to see into the future and predict crimes beforehand. Tom Cruise heads Pre-Crime and believes the system's flawlessness steadfastly. However, one day the Pre-Cogs predict that Tom Cruise will commit a murder himself in the next 36 hours. Worse, Cruise doesn't even know the victim. The movie is based on a short-story by Philip K. Dick (1928-1982), an American novelist and philosopher. His work turned into several major Sci-Fi movies: Blade Runner (1982), Total Recall (1990), Minority Report (2002), and The Adjustment Bureau (2011). Source: IMDB, Wikipedia.

The presumption of innocence principle (i.e., one is considered innocent until proven guilty) is already challenged as we speak as mere intentions are nowadays already adequate for severe verdicts. Most of us will not mind in case of terrorism. Most of us would mind if it would concern us.