Data is the new oil, according to the Economist. The problem is how to extract and trade it without diminishing its value or comprising privacy and security.
Unlike oil, it can be copied and shared, which undermines its scarcity value. This is a source of huge frustration for banks, which have come to regard customer data as a valuable asset. If they sell the data itself, they are diminishing its value. But that is not their only problem.
Strict global and sovereign regulations protect customer data from exploitation and misuse, including fraud. As a result, it is illegal in many jurisdictions to export customer data. This makes it harder – and more expensive – for banks to aggregate and analyze data sets across regions or feed it into machine learning programs to build credit risk profiles, fight fraud or combat money laundering. Banks are stuck with having to run multiple models on individual data sets within each region or anonymize data for export.
The first option results in smaller data sets, which limits their usefulness and delivers poorer predictions. The second option fails to deliver the full value of the data. Here’s why.
For the complete article please see the original post at Temenos.