In open banking and beyond, data presents us with a wealth of new opportunities. As new technology (and regulation) makes it easier to access and analyse data, consumers can expect unimaginable new services in the coming decade. At the same time, the notion that data is becoming core to our lives puts new responsibilities on the companies managing that data.
As Amazon’s former Chief Data Scientist, Andreas Weigend saw this challenge at scale. And according to him, it always comes back to one thing – trust: ‘Trust is much more difficult to build than to lose,’ he said on stage at the Slush tech conference.
This is Andreas Weigend’s advice on making the most out of your data:
1. Respect and empower your customers
Andreas Weigend underscores the importance of always keeping the user’s perspective in mind; and to make all different trade-offs of using a service explicit. ‘That’s how trust is created,’ he says. ‘Be clear in your communications about what benefit you are giving to consumers. Do users understand what value they are getting in exchange for their data?’
2. Start with a question or problem, not with the data
The true value of data lies in extracting meaningful answers or insights from it, Weigend says. To get the right answers, you need to be formulating questions – hypotheses – and testing them against data. Weigend urges companies to pick small problems, praising them ‘as the best starting point for big data’
He adds that Amazon is essentially one big experiment machine; using data for experiments and then making continuous modifications to improve their services. Amazon’s data philosophy relies on the PHAMEframework: Problem, Hypotheses, Actions, Metrics and Experiments.
3. Focus on decisions and actions
A common pitfall is starting from data mining and losing track of the end users. Weigend’s work centers on turning data into decisions with customers’ long-term best interests in mind. ‘Focus on metrics that truly matter to your customers and not your accountants or lawyers. Understanding how your customers behave and make decisions is critical to designing powerful incentives,’ he says.
Turning data into a ‘goldmine, not a landmine’
Whether it’s startups launching new business models on top of financial data, or ‘big tech’ expanding into banking and healthcare – customers, at the end of the day, expect companies to manage their data with integrity. ‘You need to clearly tell customers where you are going, and what you are doing with their data,’ the Stanford PhD and author of ‘Data for the People’ said.
In order to make data ‘a goldmine, and not a privacy landmine’, Weigend continued, we should view data as a tool for making users’ lives better – rather than an end in itself. By acting in this way, you can make your data strategy into a competitive advantage.