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St Giles Resident wonders - Is it wrong for banks to use your social graph?

Written by Alex Bray Monday, 19 December 2011 22:47
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Is it wrong for your bank to use your social graph - the personal data you generate within your various social media outpourings - to make decisions about you?

Much as in the famous song from ‘The King & I’, banks hope that once they’ve got to know you, you’ll get to like them too.

But it doesn’t end there.

Social graph data can enable banks do much more besides. So, should banks be using this data?

Banks need to tread carefully here.

Research shows that younger customers are very happy to share their data with anyone (as Mark Zuckerberg said in 2010, ‘Privacy is dead’).

But young customers tend not to be valuable customer and many older folks (above the ancient age of 30) are a lot more twitchy about their data. When we place our personal data into Facebook, Twitter and the like, we seldom pause to wonder if we are going to be assessed by the powers that be.

Most social media is an unofficial and semi-private part of our lives that we share with a network of known and trusted contacts. So you may have clicked to follow your bank.

You probably didn’t read the small print and have no idea that your off the cuff status updates, old college friends and list of random things you’ve liked may now have a material impact on how you are treated or your loan score.

Having these factors used by a bank without your knowledge would feel intrusive and thus be unwanted.

Research has showed that the safe keeping of personal data is one of the few areas where banks are still trusted by customers. Banks cannot afford to damage that trust in the current environment as the reputational and regulatory backlash would probably be severe.

To readmore, check out Alex's blog @

http://stgilesresident.tumblr.com/

Alex Bray is the author of a forthcoming report Augmented Reality in Financial Services (Searching Finance 2012).
Last modified on Monday, 19 December 2011 23:26

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