Picture the final scene of the movie “Raiders of the Lost Ark,” where, much to Indiana Jones’ dismay, the Ark of the Covenant is crated and tucked away among thousands of other crates of artifacts the government did not want found. Now, picture the opening of the latest installment of the “Raiders” movie franchise and the work that went into retrieving another artifact – alien remains – involving a fanciful use of gunpowder to find the magnetically-sealed prize.
Now, picture a digital version of that warehouse being used by a company to store away trillions of bytes of digitized demographic information that may someday be deemed useful. Google does it. So do Amazon, Microsoft, and Yahoo. Besides the big tech names, so do supermarkets, drugstores, convenience stores, automotive companies, credit card companies, beauty salons, phone companies, and the place up the street that changes your car’s oil.
They collect demographic data, including:
- Basic information, such as your name, address, phone number
- Purchasing information, such as how much money you spend and what you spend it on
- Location information, such as where you spend your money (online or “brick and mortar”)
Essentially, a data warehouse is an integrated collection of databases working together to facilitate extracting meaning from that data. The idea is to make the data meaningful and useful for helping businesses make decisions on how to best move their objectives forward.
Here are a couple of ways companies collect data about you during the course of a normal business day:
Example 1 – You make a trip to your local drugstore to fill your medicine cabinet for the upcoming flu season. You produce your rewards card to log some store points and get a 50 percent discount on your favorite cough drops. The store clerk has you insert your debit card into the card reader, and your purchase is complete. Now, the drugstore knows what kind of cough drops you prefer and your bank knows when you like to shop for medicines.
Example 2 – You get in your car and drive off on vacation, stopping quickly at the local gas station to fill up for the trip. Along the way you use your credit card to fill up the gas tank in the next state over. By the time you reach the state after that, you find that your credit card has been disabled. When you call your bank to find out why, you discover they suspected fraudulent activity was taking place on your card, because it was being used in multiple states you don’t live in. Your bank now knows you are on vacation.
Through the process of data analysis, or data mining, companies use data analysis tools to uncover the patterns in the data they have collected. Companies then use this analyzed data to further their business interests in a way that identifies spending trends to maximize bottom-line profits. And occasionally, businesses are asked by government to share their data to further the investigation of possible criminal enterprises.
So, the next time you receive that yearly data privacy disclosure from your credit card company, you might want to take a few minutes to review what data that company collects and how it shares that data.