Big data - what it is

Big data refers to the collection and storage of large volumes of diverse data processed at great velocity using technological tools and analytical and advanced methods to predict consumption behaviours and patterns (data mining).

On the basis of data collected from websites, social networks, signals from smartphones or the use of payment cards, financial institutions are able to:

  • Create consumer profiles and consumption patterns;

  • Direct tailored financial product advertising to specific target audiences;

  • Assess customers’ creditworthiness.

 

Advantages for consumers

The use of big data may:

  • Enable financial institutions to offer products and services that better meet the needs of consumers;

  • Help financial institutions to prevent frauds, for example by enabling the timely detection of attempts to debit a current account not authorised by the consumer;

  • Facilitating access by consumers to financial products and services, for example by gathering information on a consumer’s ability to pay a loan using non-traditional channels, making it easier for the consumer to get the loan.

 

Risks to consumers

The use of big data may carry risks for consumers:

  • Consumers may be incorrectly assessed by financial institutions because analytical tools using big data may contain errors;

  • Consumers may experience difficulties accessing certain financial products, because institutions may have information on them that may change their creditworthiness assessment;

  • Consumers may receive targeted and tailored offers for products or services from financial institutions, which may make it more difficult for them to compare products or services and prices.

 

Precautions consumers should take

In order to mitigate the risks arising from the use of big data:

  • Control the personal information you share online, including on social networks, and with your financial institution;

  • Check your privacy and data protection settings and make sure they are set to a level of security that meets your needs;

  • Only consent to the processing of your data if you are comfortable with the financial institution and how it will use your information;

  • If in doubt, request clarification from the financial institution.