Data is the new oil… so to speak

Article originally published in the Mortgage Introducer Sept/Oct 2023 – page 26

In 2006, British mathematician Clive Humby is said to have coined the phrase “data is the new oil” but over the interceding 17 years, what he actually meant by that has got rather lost. “Like oil, data is valuable,” he said. “But if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity. So data has to be broken down and analysed for it to have value.”

Anyone who’s had a conversation about “big data” or “analytics” or “machine learning” over the past decade will know that the majority of those outside the data functions in businesses are still a bit vague about how it all works. Companies have long accepted that collecting data is important, protecting it is now a highly regulated activity and preserving the privacy of the owners of that data is paramount.

But many have fallen into the trap of thinking data itself is valuable. We know from our own experience and that of our clients that an awful lot of that data has immense value, but it’s all muddled up with yesterday’s leftovers, a healthy dose of imagination, erroneous tests and worse case, wishful thinking.

Fact and fiction are indeterminate until data is refined, sorted and evaluated. We’re at an interesting touch point at the moment when it comes to this. How do we determine which data is true? Which data is of value when it comes to translating trends into business strategy? This has been a very real challenge for businesses over the past decade – even for those which excel at harvesting and using data meaningfully.

The advent of artificial intelligence and its quite sudden accessibility to every person has spun the data equation on its head. ChatGPT – the natural language processing tool which can talk to you like a friend, that will admit when it’s wrong, write university papers and answer your emails for you – is the start of a new era when it comes to data. It has had companies thinking hard about the opportunities and risks that come with AI. But common themes are emerging about security and property rights as well as reliability and timeliness of the core material – data.

Some sectors have pioneered the way they use data very effectively, others have found the going tougher – especially in highly regulated sectors. Writing for Forbes magazine recently Nisha Talagala, an entrepreneur and technologist in AI and AI literacy, articulated the conundrum very succinctly.

“Data abounds,” she said. “But it is not all the same quality. Some data is dirty – filled with mistakes and omissions. Some data is flat out wrong and yet others are fictional. This is particularly true if you rely on public domain data. Some datasets contain bias – which can create major risks for businesses if used in an AI. Some simply contain mistakes.

Her conclusion was: “A solid understanding of where the data comes from is essential to knowing whether the insights the data generates are valuable or even safe.”

This is a perfect example of why data provenance is so fundamental. AI, or if you prefer machine learning, however brilliant, is self-taught through exposure to data – unfathomable amounts of it. But when there is a gap in the data available to it, we all need to be aware of how AI fills in the blanks. When you are in charge of a business conducting regulated activities, accuracy isn’t a nice to have. It’s a necessity. Data has ingrained bias as well as the opportunity to illustrate new areas of opportunity.

Writing for B2B publication The Drum, programmatic privacy, governance, and security platform Ketch’s strategic adviser, Jon Suarez-Davis said: “As we look to the new data economy, we need a new guiding metaphor. A way of thinking about data that focuses less on simply exploiting a resource, and more on building equitable and sustainable relationships with consumers. He ends, “The reality is that data isn’t a resource to be passively extracted from consumers – it’s more like a currency that consumers actively invest in in order to unlock specific benefits.”

Winning in this newly evolving landscape is achievable. Doing it alone is not. Having a partner whose expertise, experience and knowledge complements and adds to your own is the way to start.