Yale CPSC 457 - Sensitive Information in Financial Services (14 pages)

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Sensitive Information in Financial Services



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Sensitive Information in Financial Services

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Pages:
14
School:
Yale University
Course:
Cpsc 457 - Sensitive Info in Wired World

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Sensitive Information in Financial Services CS 457a Introduction Financial services is fundamentally an information driven industry Consumer financial transactions generate huge amounts of personal data Every ATM transaction credit card purchase check deposit and loan application leaves electronic traces in the form of transaction records at both your bank and often the counterparty s financial institution The sheer volume of such transactions is huge Visa s USA division alone processed 14 Billion transactions in 2002 1 Financial institutions can use the information acquired in the course of business beyond the basic function of rendering the service requested by the consumer Databases of customer data and provide insights in to customer habits and allow institutions to connect consumers with products they are likely to want Detailed transaction databases also allow financial institutions to more efficiently price products For example data mining tools enable better estimate and understand important costs that are not known a priori such as credit risk and price loan products accordingly There is little question that customer information is quite valuable to businesses For years the courts have held that customer list are valuable and can be protected as trade secrets Financial information is an interesting class of personal information to look at from a privacy perspective because it exists in large quantities is non public and is often sensitive yet a singly piece of information can be handled by a wide range of entities Clearly some level of information sharing is needed to effectuate financial transactions It would not be possible for example to deposit a paycheck in your bank with out your employer and its bank also knowing the important details While a consumer understands this necessity advances in databases and communication technology now allow financial institutions to compile vast amounts of data about their customers and even create profiles of their



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