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Consumer data – high volume

Consumer data – high volume, high risk

Sunday, 09 August 2015
A recent report commissioned by Payments UK – "The Future of Payments" produced by Consult Hyperion – shares a view of what the payments world could look like over the next five-to-ten years. One of the paper's predictions is that there will be "substantial developments in the information available to customers, and further improvements for retailers" within the next five years. It's hard to disagree with this vision. The opportunities for value-add services within existing payments infrastructures are severely limited. Retaining more meta-data about a payment and making it accessible is one relatively simple way to offer just a little more. Payment solutions have regulatory controls that stipulate the levels of security around payment information. This doesn't, however, cover the vast majority of meta-data that a retailer is able to capture about a customer. In February 2012, the NY Times published an article "How Companies Learn Your Secrets" that, among other things, described how the simple act of capturing and analysing a person's shopping habits is used to enrich what a retailer knows about its customers. Therefore, the amount information held by a service provider or retailer is, legally, not restricted solely to the data that a consumer either surrenders to them or explicitly gives permission for them to hold. It is likely that the majority of consumers would be horrified if they fully understood what information is held by those whose services they use and how that information is or can be used. This extended information is currently naturally compartmentalised by retailer – the entity which captures and enriches the data. Unfortunately, reports of high-profile data breaches are on the increase (albeit slowly at the moment) and even some core technologies are under attack. Reaction to the most recent data breach, at Ashley Madison, has been focussed on the data that was released, its context and the potential risk to customers based on the nature of the site (e.g. blackmail). Credit card and transaction information itself has remained largely anonymous to the casual browser. The Ashley Madison data does, however, provide additional enrichment opportunities for holders of other related data. It can provide links between email addresses, transactions and locations as well as filtering criteria on matching card numbers to users. Considering a deliberately extreme example, if the data breaches now escalate and cascade, venting more "profile" type and transaction data into the public domain, a far more global picture can become available of an individual. As this picture grows, so does the risk of fraud and the circumvention of existing methods of identity verification. At some point, it can no longer be assumed that "private" data is indeed only known to the customer. All this amounts to an increasing risk to the payments industry and it can no longer rely on insular security regulation for merchants and payment processors. The solution is not obvious; consumers continue to share information with various online service providers and financial services providers are understandably keen to limit the number of hoops customers have to jump through to use their financial products. However, the world is rapidly changing, as is consumer behaviour, and the industry needs to be wary of and proactive in addressing the risks presented by these changes day on day.
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