If you needed another reason to be cautious and paranoid about your privacy – you’ve got one! Banks are being encouraged to use a customer’s cell phone metadata to determine their likelihood of repaying a loan. According to the developer of the technology, a bank could reduce their default. We’ve learned with astonishment how law enforcement agencies are employing devices (such as Stingrays) to learn location of and poach information from cell phones, but this new revelation is certainly surprising and startling.
By innocently using everyday devices and objects such as smart TVs, autos, computers, and phones we already provide a trove of information to anyone and everyone sifting for data. Auto dealers can provide insurance companies with driving data from the GPS and other on-board computer systems, while smart TVs, computer searches, and email correspondences offer marketers an opportunity to learn our habits and predilections. And they have long ago lost any notion that they are just trying to improve the consumer’s experience. However, the idea of something as personal, private and thought to be sacrosanct as a loan application being dependent on phone data is a bit much.
Yes, researchers are now exploring the use of metadata to better determine whether you should receive a bank loan, because, apparently, according to their research, a customer’s financial risk can be ascertained by merely studying their cell phone behavior,
“Daniel Björkegren, an economist at Brown University in Providence, Rhode Island, is working with EFL to predict whether someone will pay back a loan based on their cellphone data. He combed through the phone records of 3000 people who had borrowed from a bank in Haiti, looking at when calls were made, how long they lasted and how much money people spent on their phones.
The algorithm looks at this metadata to get a sense of a person’s character. Do they promptly return missed calls and pay their phone bills? That suggests they might be more responsible. Are most of their calls made in an area far away from the bank branch? Then it may be hard for the bank to keep tabs on their whereabouts.”
Often, marketers will claim that the data being collected offers only partial information about a communicator, that the data is anonymized. What is somewhat alarming to learn is that, in this instance, researchers were able to identify people 90 percent of the time using just four pieces of information. Hence anonymous data is not really anonymous.
And while such a system might be great for the banks, it’s probably not so great for you if you didn’t want your cell data used in this way. And as the New Scientist notes, should you protect your privacy and opt out of your cell data being used in tangential business relationships, customers in the not-so-distant future might find themselves labelled as “suspicious” by companies -simply for not being in a sharing mood!
In today’s connected world where marketing is everything, and shortcuts are valued, the consumer must be increasingly vigilant and selective about matters pertaining to communication. Sometimes, in getting all worked up about larger privacy issues, such as NSA data collection, and haranguing politicians for more privacy protection, we lose sight of the simple, ordinary things we do- such as talk and text on a cell phone – which leave us vulnerable to marketers and decision makers.
Personally, I have to tell you that I am happy to be at a stage in life where loan applications are not an issue, and living in a part of the world where my every decision is not dominated by an outcome determined by a credit score.