This article was originally commissioned for Inner Workings, a monthly column written by Tom Murray, in the April 2018 edition of the Actuarial Post.
The outright abuse of personal data epitomised in the recent scandals, concerning elections in the Western world, has shown that there are severe limits to the level of controls that you can put on your information once you have submitted it voluntarily online. If a total stranger sat beside you on a bus or a train and asked you about your personal musical preferences or which newspaper you liked to read, you would be very wary about supplying the answers. Not that there is anything particularly top-secret about such information, nor is it very personal, but nevertheless an uneasiness would creep in that the other individual had to be up to no good if they wanted that kind of information. In other words, you would assume that you were being setup for a sting.
And yet, in the online world, we are constantly giving reams of information to total strangers without necessarily considering what possible use there could be for it. So, via games or trivia quizzes, we give information about our views on a wide variety of topics, often quite trivial, without giving a thought to what the end-user is looking to do with the information. In fact, rather foolishly, we seem to take the approach that people are doing it just to entertain us, as if anyone would do that for free.
As the MetaFilter user ‘blue_beetle’ accurately observed "if you're not paying for something, you're not the customer; you're the product being sold". Over the last two decades, the population has embraced the concept that the internet should be free, without properly considering the fact that nothing is free and that if we weren’t paying an open price, we would certainly end up paying a hidden one.
The harshness of this statement is something that needs to be borne in mind for those of us in the life and pensions industry wondering how best to use social media as part of the offering to our customer base. The area of life and pensions is fraught, concerning intimate personal details of the individuals seeking cover. Even marketing via social media could lead to information being deduced about the individuals requesting more information as the advertisement that they respond to could well give information about their financial fears and, by implication, their current financial circumstances.
And yet, it can’t be ignored. Despite the current furore over the abuse of Facebook information, not to mention the organised attempts to reduce its impact via the various campaigns to get people to delete their accounts, social media will not disappear overnight and will weather this storm. Better versions of these apps, such as Vero, which doesn’t use adverts because it is subscriber based, may well become more popular as some people try to find ways to keep their data safe. However, it is probably true to say that digital addiction is here to stay and therefore all industries, including life and pensions, need to become more social-media savvy in terms of being aware of the dangers of personal data abuse, whilst still making use of this unique and highly effective way to reach targeted audiences for their products.
The life and pension sector is a highly regulated area and it befits it to act in a responsible manner. Social media strategies for life and pensions companies therefore need to have an overarching ethical policy supporting them to ensure against accusations of abuse of information. There are some key areas that must be covered under any such policy. The following list is not exhaustive, but it is a starting point for the development of such a policy.
Firstly, under no circumstances should any information gathered be shared with other organisations, even under the same corporate umbrella. Secondly, data gathered should be openly requested rather than gathered under cover of ‘fun-quizzes’. Thirdly, all data should be gathered directly rather than through a third party so that there is no confusion about the purpose of the information gathered. Finally, consent needs to be received from the recipient that they are happy to be offered products or further services based on the information given, rather than just inserting adverts into their timelines in the hope of catching them.
The early stages of social media have been based on this sort of subliminal advertising but the kick-back to the current scandals is likely to lead to regulations that will prevent firms from doing this and it is better to be out in front of the regulations rather than running from behind to conform. Getting people to “Like” your product or service will only be possible if you can establish and maintain a level of trust that makes you stand out from the majority of services currently on social media – a task made much harder by each succeeding revelation of abuse in the press. This can only be achieved by an ongoing transparency in your online presence, which lets people build trust in your message.