Thriving through the data wars (and other looming perils) by ‘banking’ on a new core strategy

Imagine a reality where your data – not dollars, gold, or oil – but your personal digital DNA is the most valuable and desired commodity in the world. Now, imagine a global market where your data is sold, traded, analyzed, deployed, and consumed as the catalyst for economic, political, and social power. 

Having trouble envisioning that dystopian universe? Here’s an easy solution, just turn on Netflix and watch The Great Hack (word of wisdom … you might want to stock a copious supply of your favorite tonic!).

It’s the latest trending Netflix documentary. 

It’s trending because it’s alarmingly timely and inescapably relevant.

To summarize a couple of controversial and potent comments from the film: data is the essential commodity of our contemporary moment (not dollars, oil, gold, etc.); and the identity and behavioral data of individuals/communities is the core asset of a modern global economy of power, influence, and profit (not deposits and loans).

The Great Hack is a dark rabbit hole, which puts forward testimonies, investigative journalism, and recent/historical events to support a disturbing thesis: personal and private data rights do not exist in the free market of the internet, and you, your relationships, your community, your thoughts, desires, habits, etc., have been collected and concentrated to become a core of a new global marketplace of influence, power, and profit.

While these are troubling realities for our financial services industry largely – still on comparatively archaic technologies and platforms designed to process only a couple of antiquated assets (deposits and loans) – the core theses from The Great Hack don’t have to translate directly into terrifying inevitabilities and eventual extinction of our industry. In fact, the controversial trends and realities captured in this most recent Netflix documentary probably demonstrate immediate potential for our industry (that is, if we’re willing to embrace our roots as community epicenters of trust, connectivity, and sustainable/responsible control of commodities). 

However, if we (as an industry) continue to conjure up excuses as to why these facts don’t/won’t apply to us (or our institutions), personally or locally. For example, some of my close friends and family have responded to the film with clever quips like, “I don’t use Facebook; so, it doesn’t impact me;” they boldly and ignorantly assert while involuntarily glancing at their favorite messaging app, game, or other ‘hook’ on their smart phone. Ignorance is bliss! 

As professionals within the community financial services space, we cannot afford to ignore the core theses and controversies of this latest Netflix documentary.

This is because, as local financial institutions, we are uniquely situated to help provide solutions to the crises of privacy, local sustainability, and security which are pervasive and (as the film illustrates) irreversibly problematic in our moment. Local financial institutions with modern technology toolsets and relevant core business strategies are positioned (perhaps alone) to be allies for consumers and communities awakening to the dangers and damage of the ‘data wars.’

You might be thinking, wait, why/how is my institution embroiled in this “data war”?

For years our organization has worked alongside credit unions to promote a simple idea – resilience and relevance in the era of disruption through intentional, centralized, and strategic control, understanding, and use of data.

Financial institutions (regardless of size or structure) sit atop deep and desirable veins of digital gold. 

Your members’ personal, financial, transactional, borrowing, and resulting (derivable) behavioral data are amongst the most treasured targets of our 21st Century digital economy.

Google, Amazon, Apple, Facebook have all demonstrated the simplicity (and elegance) of business strategy in the modern, digital, internet economy – amass, centralize, and control data.

So, what have you done with the invaluable ore in your community?

In part two of this article, I’ll offer a candid assessment of how most credit unions have addressed this situation (or failed to address, by outsourcing and implementing siloed/platform solutions). Then we’ll explore solid advice that all credit unions should heed if they want to remain a relevant force and help shepherd their members through the data wars. 

Click here to read part two.

Jon Ungerland

Jon Ungerland

Jon believes that local financial institutions can contribute to the flourishing of democracy and the quality of community life by ensuring fair and affordable access to capital and modern banking ... Web: Details