Last Updated on June 3, 2022 at 11:14 pm
Yes, that is right! Each time we get on the internet, search for information, get entertained, use social media, shop online, buy and sell stocks, pretty much anything, we are part of someones’ data experiment! Whether we like it or not, whether we consider it an infringement of privacy or not, we simply have no other choice.
Next time you search on Google or Amazon, notice that the results URLs are extremely long. For example, this is the URL for the search result “best mutual fund”
https://www.google.co.in/search?ei=3S2ZW8WOPIz0vATXj7q4BQ&q=best+mutual+fund&oq=best+mutual+fund&gs_l=psy-ab.3..0j0i131k1l2j0l7.21789.23961.0.24344.16.16.0.0.0.0.171.1572.9j6.15.0..2..0…1.1.64.psy-ab..1.15.1569…35i39k1j0i67k1.0.64ZOfNH79f4
Now, I do not know what exactly those alphabet and number sequences mean, but I do know for sure, they are labels that are part of some machine learning experiment that Google is conducting. Gone are the days when websites had to be linked in with many other websites to get search traffic. Today Google understands and recognises user engagement.
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It knows and understands what kind of websites people click for each search term, how long they spend on it and come back if unsatisfied etc. It has become so smart that it can now direct a search query garbled with Hindi and English alphabet to the right search page. All this, thanks to “big data”
What is big data?
The simplest and most appealing definition is found in the book Big
Data: A Revolution That Will Transform How We Live, Work and Think by Viktor Mayer-Schoenberger& Kenneth Cukier
big data is the ability of society to harness information in novel ways to produce useful insights or goods and services of significant value
Essentially it means, collecting immense quantities of data, slice it and dice it in a million ways to get insights. This is what I mean by the title. Each time you use the internet, you are part of someones’ experiment – big data or small data does not matter.
If you have not read the above book, I strongly recommend it. It will blow your mind. The first chapter is free to download (legally). Even this little nugget gives you all examples you need about how useful big data is.
Let us consider an example of big data. This is imaginary (as of now), but will hopefully get the point home. Suppose I own the cafeteria in your office and am interested in cutting unnecessary costs, unnecessary effort and enhancing profit. So the first thing I do is to not just use an electronic billing system that merely gives out bills according to preset prices. I connect it with a computer and store every bill detail in it.
After a month or so, I sit down and analyze the data. I find out if there are patterns to when people order what. For example, do they drink more coffee on Mondays? Do they enjoy ice cream more on Fridays? If the company has recurring project deadlines, does it show in the food and drink orders? Which kind of food items sold the least and so on. This is pretty basic stuff, but can actually be effective.
How about we take it further. I install cameras around all the tables and watch how people eat. Play around with side-dish quantities and watch how people respond. Do they ask for more or do they leave? What if I cut the salt a bit? Do they then reach for the salt dispenser in the table? What kind of foods gets wasted the most? This is a pretty crude example, but this is exactly how big data works.
Call it spying if you will, call it tracking if you will, but the bottom line is, in some of the most popular websites we go every day to and during some of the most important things that we do online, someone is recording each of our moves and deriving useful insights from it.
Is big data good or bad?
Big data is not only good it is also a useful, life-changing development. For eg. in the chapter linked above, you can read about how Google can track the spread of a virus across a country and help health officials. Here are two articles that can shed more light: “How Google is Remaking Itself as a Machine-Learning-First Company” and 7 Machine Learning Applications at Google Even these are two years old. I will try and get newer articles.
Naturally with the good is mixed the bad as in everything else. There are tons of web pages that discuss if Google is spying on us, invading our privacy or selling our data. One thing is clear, Google has no need to sell out data. It knows how to make productive use of it. Two well known visible examples are its advertising services Adsense and Adwords. The spying and privacy debate boils down to opinions, but the simple truth is, whether we like it or not, there is no escape from this.
My gut feeling is, this is the reason why Paytm can afford to set up a direct mutual fund portal for free. They get user data in exchange. Unlike Kuvera which sells such data analytics to others, Paytm does not need to that (although at this point, more clarity is required)
Paytm Money Usage of Your Personal Data
The following is an extract from Paytm privacy policy
We use your Personal Data in our business operations for providing our or our partners’ products services and to perform, among other actions, the following:
- To facilitate the transactions or report on these transactions;
- To undertake research and analytics for offering or improving our services and their security and service quality;
- To check and process your requests submitted to us for products/services and/or instructions or requests received from you in respect of these products/services;
- To share with you, updates on changes to the products/services and their terms and conditions;
- To take up or investigate any complaints/claims / disputes;
- To respond to your queries or feedback submitted by you;
- To verify your identity for us to provide products/services to you;
- To carry credit checks, screenings or due diligence checks as lawfully required by us;
- To monitor and review services from time to time;
- To undertake financial/regulatory / management reporting, and create and maintain various risk management models;
- For conducting audits and for record keeping purposes;
- For selective offers and promotions.
We also use your Personal Data to fulfil the requirements of applicable laws/regulations and/or court orders / regulatory directives received by us.
I am no expert on privacy laws and usage, but that is reasonable to me. Assuming Paytm direct MF takes off as they intended, they can use the data to sell other products, influence how people buy and sell mutual funds or other products etc. This is big data at its best. A business exploiting user-data to gain more business.
Freefincal itself serves as another example of such analytics (not big enough to be called big data but the principles are the same). Suppose I do not collect any kind of analytics and simply write content. Now whether people like me or not, most members of FB group Asan Ideas For Wealth (AIFW – run by the incomparable Ashal Jauhari) know who I am.
That group has almost 49K members as on date. If I go by the number of people who like my posts there (without reading the article) and the number of people who comment on them (without reading the article), I will think “hey many people like my content here, I must be getting most of my traffic from here”.
Truth is that I get only 3% traffic from all of Facebook (including my personal wall and freefincal page). Recently my twitter traffic is inching up (I am @freefincal btw). I get about 40% from Mr. Google and 40% from .. ahem .. people who come visit me directly.
The point is, in the absence of analytics, I will be catering to the wrong sources and worry about what every member of AIFW cribs about. Since I know it is only 3%, I can be a lot more selective about who I take seriously there.
Analytics is not just useful. It is indispensable. For a business, effective online analytics is the difference between thriving and surviving.
Issues about privacy
Now the data collected is divided into personally identifiable information such as name, pan no, aadhaar no, address, mobile no etc and personally non-identifiable information such as age, gender, city and state of residence, products purchased, products browsed etc.
No company that wants to remain in business will sell personally identifiable information. However, employees can do this illegally! How else do you think we can buy mobile and email lists online? How else do you think we get that 11 am all from trading houses or charities?
The sale of personally non-identifiable information does happen (eg Kuvera), but not everyone is comfortable with this. In a poll I conducted at AIFW about the sale of such data (in general), 240 members were okay with it and 173 against. So although a good number of people do not mind in exchange for convenience, a good number do.
Non-identifiable information can also be sold to advertisers on a platform. This is the way Google, Facebook, Twitter, Linkedin, Quora etc operate. So the people who objected above should also have a problem with these sites!
The ads that you see on this page (if you have been kind enough to allow them) also operate on personally non-identifiable information. However, they also use your browsing history. For example, if you look for a product on Amazon and go to an Adsense enable site, you will see Amazon ads for that product! This is personally identifiable, but the person identifying it is only you! You can prevent this by asking the browser to clear cookies when you exit (if you exit, I never close Chrome until it crashes) Even this can be disabled for EU users. I hope this is available for all users soon.
By the way, speaking of Chrome, it is one of the biggest sources of data for Google. I head in a talk that Chrome was developed by a team led by Sundar Pichai. Its success is the reason why he is CEO today.
Big data can also be used for internal analytics for generating more sales, increasing efficiency, reducing costs etc. You can find ways to avoid the above, but this – analytics for profit and growth – cannot be avoided.
The case of Aadhaar
Aadhaar also has big data in mind. The privacy concerns regarding Aadhar is two dimensional. On the one hand, people do not like the government using Aadhaar to analyse the distribution and implementation of welfare schemes. On the other hand is the worry that the Aadhaar database will be hacked (and we see reports every day!) and someone will use Aadhaar to steal our identity and/or assets. This is a valid concern and must be addressed by the government in a better way.
The use of big data for better governance is indisputable. What is however disputable is, do we need Aadhaar for such analytics? I think most people will answer – no.
Let me say it again because it sounds nice. Whether we like it or not, whether we think it is a breach of privacy or not: it is not possible to use the internet without being part of someones’ data experiment.
I am sure (well I hope) many privacy, security and data experts will be reading this. If you have anything more to add, correct, especially specifics, leave a comment below. I will publish select comments in a later post (anonymously if you like!)
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
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