|
The Darker Side of BI
|
| Written by Mel Duvall |
One of the great promises of data mining and business intelligence software is that companies can use insights gained to more finely tune their marketing and sales campaigns.
By better understanding their customers, their income levels, shopping habits, and behaviors, companies can personalize marketing campaigns, spend less money on advertising that isn’t hitting the mark, and ultimately, close the sale.
For the most part this is a valid and beneficial use of the analysis power being provided by today’s giant data warehouses and business intelligence tools. But a story in the New York Times this week points to a less appealing and somewhat disturbing use of this technology.
The Times article, part of series on how consumers ended up in the current debt trap, points to the increasing use of data mining systems to specifically target people who are running into financial trouble.
A rational conclusion is that banks might use this intelligence to find out who might be a credit risk and refrain from issuing them credit cards or loans.
In fact, the opposite is true. It turns out banks and credit card issuers have been using this information to target financially troubled consumers to take out high interest credit cards, car loans and second mortgages.
Think about it. If you found yourself in financial difficulty and suddenly an offer came in the mail for a pre-approved credit card with a $10,000 limit, you would be sorely tempted to take advantage of the offer even though you knew it might dig you deeper into debt. When creditors are banging at the door, common sense can get pushed aside.
Credit agencies such as Equifax, Experian and TransUnion and other similar rivals, keep track of an increasing array of personal information. For a price, they can provide credit card agencies with names, addresses, social security numbers, marital status, recent births, and even such highly personalized information as the magazines they read, the car they drive, and their cable provider. That information can be combined with other sources, including bank and court records, to create “trigger” lists of people who may be in financial trouble and ripe for a credit card offer.
The Times article highlighted the plight of one woman who after filing for bankruptcy began to receive as many as six to 10 credit card or loan offers a week in the mail.
Most people would agree that business intelligence systems are extremely valuable in terms of improving the effectiveness of marketing campaigns and in helping companies better understand the needs of their customers.
However, this use of data mining – to specifically target people at financial risk - is disturbing at a minimum and morally bankrupt at the extreme.
Only registered users can write comments.
Please login or register. |
| [ Back ] |
