Many of us have heard of Moore’s Law, which is named after Gordon Moore, one of the founders of Intel. It projects the rate at which microprocessors per circuit double every two years or so. This prediction has held true for nearly forty years and is one of the reasons that computer chips are in everything from cars to phones to the refrigerator that tells you when you are getting low on ice cubes.
Along with the dramatic advances in computing power on smaller and smaller chips, we have seen enormous increases in the capacity to collect and store the data that all these microprocessors are generating. This includes the data that we access and create as part of our everyday lives. We are all a bit like Hansel and Gretel leaving a trail of interesting crumbs whenever we use our phones to look at restaurant menus and book a table, post a photo on our Facebook page or order a new jacket from our favorite retailer. All those crumbs are stored and added to information from other consumers to spot trends and draw conclusions about consumer behavior. Such a trove of information was never possible before the digital age.
The expression “Big Data” came into its own six or seven years ago and was used to describe the vast quantities of information that could be stored, analyzed and manipulated to advance the understanding of science, medicine and demographics. Researchers believed that the massive amounts of data would help identify outbreaks of disease more quickly or help police departments identify crime hotspots and direct resources more efficiently where needed. Some researchers thought that the use of sample data as a technique to study medical treatments would become obsolete because it was now possible to study every documented case of a particular disease or treatment.
Big data is also used to collect and, more importantly, to connect personal information from a variety of digital sources. The convenience of using our phones and other devices to communicate and organize our lives comes with some risks.
One of the most well-known examples of the misuse of readily available customer data was the Nordstrom experiment using the pings from customers’ smart phones to track their progress through the store without their knowledge or permission. Did you linger in the coat department? Skip over the cosmetics department? Shoppers flooded Nordstrom with complaints after the company eventually put up signs announcing this new technology, and the experiment was quickly ended.
Despite the relatively rare occasions when companies like Nordstrom get it wrong, the amount of personal information that is shared and stored is increasingly a part of how we live our daily lives. We benefit from the convenience and enjoy the close, personal and regular contact that digital networks offer.
It is important to acknowledge and accept the risks associated with having so much personal and sensitive data stored in so many different places. As a firm we are working diligently to protect your client information and to help you understand and remain vigilant to potential risks to your financial data.