The more often a certain resistance is hit
The weaker it gets…
Todd Harrison – Founder of Minyanville
Last week,
something relatively extraordinary happened in The Netherlands: there was
commotion about the privacy of Dutch citizens. In this case, it were customers
of the largest bank in The Netherlands, ING Bank.
The commotion
emerged, after ING announced that the bank was planning to start a so-called ‘big
data’ pilot soon. During this pilot, the full payment transaction data of a
small group of selected customers –approximately 1000 – would get an in-depth analysis
through data mining techniques, to deliver ‘big data’ on their savings and
payment behaviour. One of the senior officials of the bank had announced some
details of this plan to Het Financieele Dagblad, during an interview.
This big data, coming
out of the payment transactions of these customers, would be used to enable targeted
advertising for certain banking and insurance products and other special
offers. Not only by the bank itself, but also by commercial partners of the
bank – of course, after the explicit consent of the account holders.
By doing so, the
bank hoped to achieve a win-win situation: at a fair price, the bank could offer
populations of (potentially) interested customers to its commercial partners. The
bank’s customers, on the other hand, could get tailored advertisements for products
in which they would be interested and at an interesting discount. When the
pilot would be a success, the bank would enable the same services for much
larger groups of customers, in due course. “Everybody happy”, ING reckoned.
Things went… a slightly different.
After the bank
branches opened their doors and telephone lines last Monday, 17 March, the
counter clerks and the call-centre employees were ‘flooded’ with furious customers,
who demanded an explanation about the subject
that ING “would sell their personal payment transaction data ‘to the highest
bidder’”.
At first, the bank
tried to sweet-talk itself out of the situation, by emphasizing that their
customers’ transaction data would never leave the bank: the bank would only be
a “postillon d’amour” (i.e. an intermediary messenger) between the commercial
party and the customer, but the commercial party would never receive the payment
transaction data itself. Later, during last week, ING published a statement
that this plan would be postponed until “a much, much later date”. Subsequently,
the bank licked its wounds.
It was the second
time in less than a year that a similar, bold plan was torpedoed by angry
consumers in The Netherlands.
In May, 2013, the
Dutch clearing and settlement organization for the Dutch bank industry, Equens,
had been planning to sell its database of 2.2 billion payment transactions to
interested companies for marketing purposes. However, this plan had been
quickly withdrawn, as a consequence of infuriated Dutch citizens.
The main difference
between the Equens plan and that of the ING, was that ING would NOT sell the
physical payment transaction data itself, while Equens did plan to do so.
Nevertheless and in
spite of the fact that Equens and ING had encountered such angry reactions by
the general public, only days after the ING plan was withdrawn, the Rabobank
presented its plan to make usage of the big data that the
vast amount of payment transactions would offer. Here is a snippet from
www.profnews.nl:
The Rabobank sees opportunities in the usage of
in-depth analyses upon the payment data of
customers. Through these analyses, the bank could offer better service to their
customers. ‘This is about deepening the relation between the bank and its
customers. There are few boundaries in this. I would take the risk of running
into these boundaries’, according to executive Rien Nagel.
Nagel emphasizes that the Rabobank is not planning to
couple this data with third parties. “To that idea, I say categorically ‘no’.
This is an area to stay far away from”, according to Nagel.
Within the banks,
there are generally two groups of people:
- the people who invent and/or endorse such plans and see the enormous commercial advantages of those plans for the bank, as well as its customers and its commercial partners;
- the people, who receive the angry customers on their telephones and counters, and really don’t understand a. how the bank could invent such weird plans and b. that they were not informed in advance;
The first group
consists generally out of higher ranked officers and ICT engineers without much
genuine business knowledge, while the second group of people consists of people
with ‘their feet firmly in the mud’ of day-to-day business. These groups within the same bank
(!) are almost living in two separate worlds and don’t understand each other…
at all!
And even more worrisome,
the first group doesn’t have the slightest of clues what all the fuzz was
about?! They feel angry and misunderstood by their ‘clueless’ customers, while
they were genuinely trying to help them in the first place(and themselves in
the process).
Everybody and their
sister knows that companies like f.i. Facebook, Microsoft, Google, LinkedIn and
Twitter use their gargantuous amounts of detailed customer transaction data and
additional information for targeted adverts and also for in-depth analyses. In
many cases these analyses are sold to partners and business relations, in
return for (eventually) large amounts of money. This is, as a matter of fact,
their main business model and that is where they make most of their money with.
Many people also know
that these particular companies skim (and at occasions get across) the edges of
worldwide privacy and data manipulation regulations. If people would thoroughly
read the ‘agreement terms for software usage’ of such companies, when they
install their software and use their smartphone apps, the intensive care rooms
of city hospitals would be flooded with shocked users. Luckily, few people actually
read those statements.
Particularly these (and
other) social media companies act sometimes like naughty children: they try and
try to do forbidden things, until their mommy warns them or smacks them on the
fingers. Then a few moments later, they try to do the same forbidden things
again… These companies only respond to billions of dollars and euro’s in fines
and other harsh penalties. Still, many citizens simply accept this and use
their software anyway.
However, with the
aforementioned banks, the people responded differently. Here is – perhaps – the explanation:
Although it would
make your computer life much harder, people can ultimately say ‘no’ to
LinkedIn, Facebook, Twitter and even Google. There are sufficient alternatives
around, which offer almost the same service, but don’t play ‘Jedi mind tricks’
with you, when it comes to your personal privacy.
However, in The
Netherlands, it is impossible to live without a bank account.
People without a
bank account simply can’t have a job, as no company pays them in cash or checks
anymore. Besides that, the Dutch Internal Revenue Service would see people
without bank accounts as probable ‘tax evaders’ and frauds. Even the ‘tramps
and hobo’s’ in The Netherlands need a bank account in order to receive their
welfare payments. You just can’t live without a bank in The Netherlands. Really,
you can’t…
And when such a
bank, as your ‘partner of ultimate trust’ is threatening to ‘throw your data on
the street’, people finally do respond, where they remained silent in case of
privacy breaches by f.i. Facebook or Google.
In this case, ING
could justifiably state that they were understood falsely by the general public
and that it was never their intention to sell the payment transaction data
itself. Nevertheless, the damage was done anyway. What people do accept from
Facebook and Google, they don’t accept from their bank.
Still, Todd
Harrison, the very wise and savvy founder of Minyanville, states occasionally that
‘the more times a certain resistance level is tested, the weaker it gets’.
Although Toddo uses this wisdom on support and resistance levels for stock and
index rates, it is also true for other kinds of resistance.
Like in the case of
the public’s resistance against the usage of big customer data within the banks:
- Equens tried it and got bitten…
- ING tried it again, in a slightly different manner, and got bitten too.
- However, Rabobank tried it also, again in a slightly different manner, and seems to get away with it.
And in one or two
years, the Dutch people will have become so familiar with the idea that their 'big data' might be used for commercial purposes, that the banks can refurbish
their original ideas and use the real payment transaction data for targeted marketing
anyway.
This brings me to
the more urgent question behind all this: are people still the owners of their
own life and of the electronic trail that they leave behind? Or should people
just get used to the thought, that they are like birds in a cage, which are
watched all day long by anonymous people?!
From the moment
that they are awake, until the moment that they fall asleep, people are leaving
an electronic trail of:
- Identification data and social security data from their passports and ID-cards;
- Telephone, GPS and Bluetooth signals from their smartphones;
- License plate data from their cars, which are automatically registered by smart camera’s on the road, in parking garages and (even) on parking meters, where people should mandatorily enter their license numbers;
- Camera data from the ubiquitous surveillance camera’s, which are almost on any corner of the street and in any building;
- Payment data from their debit and credit cards and telebanking programs;
- Live images from their webcams: not only for their friends, but also for anonymous civil servants, who are candidly watching these images in order to find 'terrorists';
- Log in data from their computers, iPads and smartphones, which are registered on every wifispot, whether people want this or not;
People simply can’t
switch off their electronic trail anymore and cannot withdraw from; it is always there to follow them, whether they
want it or not.
And when their
trusted banks then finally ‘threaten’ to sell their most intimate data – which
is their payment data – to other parties, even the most credulous Joe Sixpack suddenly
feels a sense that ‘enough is enough’.
Which – of course – will not be enough
to stop these plans in the end…
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