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Liberate the Data: The Safe Way to Monetize Sensitive Information
The world is awash in sensitive data that if protected, packaged, and sold could provide organizations with significant value. For example, connected products and service usage, spending information, biometrics, and location data provide potent insights into customers’ needs, wants, and behavior. Meanwhile, sensitive information about business activities, if aggregated and protected with privacy-enhancing technology, can be used by other companies to inform product development, trading activity, and more. The opportunity is especially attractive to financial services companies with a wealth of transactional data on the consumers and businesses they serve. And now that the economic downturn has cut off the spigot of cheap lending and slowed the pace of feverish deal-making, capital markets firms are looking for new sources of revenue.
FTC warns about the risky practices in data monetization
Yet, regulators are increasing the intensity of their demands that businesses use safe practices to resell their sensitive data. The Federal Trade Commission (FTC) recently published a blog about the “murky marketplace” of big data sales involving producers, aggregators, brokers, and buyers. The blog warned that current data monetization practices could be exploited to identify consumers, breaching their privacy, even using so-called data anonymization practices. The FTC post admonishes businesses that many federal and state laws protect sensitive consumer data. However, they also declared that the regulator isn’t afraid to prosecute companies for significant violations.
The same is true for B2B sensitive data sales. In our new handbook, Liberate the Data: How to Monetize Sensitive Information Safely, we share the cautionary case study of App Annie, which misrepresented to trading firms that data from its providers would be aggregated and anonymized before being sold. Instead, the shared data on companies’ mobile app performance was unprotected, resulting in regulator censure, a $10M fine for App Annie, and a $300K fine for its CEO.
So, it’s clear that current sensitive data sharing techniques, such as aggregation, anonymization, and statistical disclosure limitation, are not enough to safeguard data and protect customer privacy. Instead, they can lead to leaking information, potentially limiting the data’s utility.
A better way to share and monetize sensitive information
So, should capital markets companies simply give up on their plans to monetize their sensitive data resources? Far from it. The prospect of creating new sources of revenue by sharing insights into their fast-growing big data is a competitive necessity for these financial services firms. Firms may want to share or purchase this information for such common use cases as:
- Providing certain sales and trading data to business units or affiliates to optimize the management of a firm’s overall trading position
- Offering clients axes or lists detailing securities that are available for lending
- Delivering alternative data that can be curated into research products and sold to inform other firms’ investment decisions
Fortunately, technology already exists that enables secure data sharing and monetization. LeapYear software uses differential privacy to provide provable privacy protection for data sets. Thus, when users query data, LeapYear enables them to derive statistics, while ensuring that individual records in data sets cannot be extracted or inferred. Customers can also train machine learning on datasets to improve algorithms, improving their ability to predict market trends.
Promote regulatory compliance with LeapYear’s privacy-enhancing technology
Equally importantly, companies that use differential privacy software to share, sell, or buy data can successfully demonstrate to regulators that they have maintained privacy and security.
If you want to learn more about how LeapYear’s privacy-enhancing technology enables systematic compliance, please read this in-depth memorandum from a leading law firm here.
LeapYear’s software provides end-to-end control, management, and optimization services for sensitive information. Customers have used the company’s differential privacy techniques in industries ranging from healthcare and insurance to technology and payments to protect and share personally identifiable information (PII), material non-public information (MNPI), and trading activities and strategies. Further, its software has been independently audited by experts.
[Pull quote] “Gartner predicts that 60% of large organizations will use one or more privacy-enhancing computation techniques in analytics, business intelligence, or cloud computing by 2025.” [End pull quote]
Using privacy-enhancing techniques to analyze sensitive data is a win-win for the financial services marketplace. Capital markets firms that want to sell their data can do so. They can reap millions of new revenues, knowing their confidential and proprietary information is protected. And buyers can finetune their strategies informed by new insights and richer market color.
As capital markets seek new revenue sources, they can tap their greatest resource – sensitive business and customer data. They can increase profitability by selling market insights and color based on the data while meeting regulatory requirements and ensuring data privacy and security.
Get started monetizing your sensitive data. Download Liberate the Data.
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