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Blog

The Beast and the Beauty of Big Data

Brent Armstrong, CFP®, Wealth Management Advisor, Partner | Lindsey Fiske Thompson, Strategic Operations Advisor | May 10, 2018

Ordering supper, listening to music, arranging transportation, banking and socializing can now all be handled electronically, efficiently, and oftentimes without any human interaction. While this frees up time to be with those we love, explore new places, and dedicate to our communities, increases in data sharing and accessibility present both risks and opportunities for consideration.

A recent Wall Street Journal* article highlights just how much information we share with high-tech companies when doing something as simple as planning pizza delivery and at home movie night with a friend. Ordering online, paying through the Alexa app, and using Google Maps for directions to the friend’s house resulted in two women sharing over 50 pieces of data with tech companies including Apple, Amazon, Google, and Facebook.

Ongoing news about Facebook and Cambridge Analytics illustrates some of the risks associated with data collection. The EU’sGeneral Data Protection Regulation  (GDPR) will go into effect May 25, 2018; this law on data protection and privacy for all individuals within the European Union will be enforced internationally, as it addresses the export of personal data outside the EU. Businesses are being held accountable for adhering to their privacy policies. At Weatherly, we have a strict privacy policy and comprehensive data security program addressing our perpetual commitment to securing our network infrastructure and client privacy.

How many devices do you and your family use on a daily basis? There are currently 20.8 billion devices compromising the Internet of Things (IoT) and Cisco predicts by 2020 this will increase to 50 billion. Two of the most valuable components within the digital domain are privacy and quality of service. Technology used well can help streamline our lives, but take care to guard your personal information with best practices.

Given the remarkable amount of data that is being generated by our digital footprint, Weatherly looks to capture that trend by investing in companies leveraging the information we knowingly, or unknowingly make public. Have you ever searched for a product on Google or Amazon and decided not to buy it? The next day, have you logged into your web browser and viewed an advertisement for the exact product, but now for a slight discount? Your search queries, purchase habits, and geolocation are all being analyzed to provide you with relevant advertisements. Companies like Amazon, Google and Facebook have been generating millions in revenue allowing advertisers to leverage the data they have on your behavior. These providers also remind you of recurring purchases (dog food, diapers) or search pattern.

Intelligent interaction with machines, the web and the cloud is another space that is evolving, often called Web 4.0. With cameras for facial recognition and digital breadcrumbs to accurately predict your behavior, our interactions with technology will become more and more intuitive, helpful and in some ways creepy. Imagine you wake up and your bed tells you, “Coffee is ready in 3 minutes, traffic is already looking bad, so leave 7 minutes earlier than you normally do to make it to work on time. You have enough milk for one bowl of cereal, so I’ve ordered milk to be delivered by this evening. Don’t forget to exercise, you told me last week to remind you even if you tell me not to because you’ve gained 4 pounds since last month.” These types of interactions will only become more commonplace as you get ready for your day and before you get into your self-driving car and listen to music recommended to you by Spotify based on your previous listening.

Another way to capture this data splurge from an investment standpoint is by protecting it. Cyber security from hacking is paramount to our data being contained. Companies providing solutions for consumers, corporations or government are ripe for growth as bad actors around the world work to undermine security practices. Beware of fraud via phone, phishing, and email links.

Finally, blockchain technology is being adapted to a variety of industries to improve efficiency and increase transparency. Most simply, blockchain removes the human middle-man and allows processes to occur faster with fewer errors. The goal is also to eliminate the opportunity for fraud. Some applications are found here:

At Weatherly, our modus operandi is to guide our clients’ financial lives to meet goals, and a large part of achieving those goals is through the investment process. By identifying and capturing trends, we hope to generate value for our clients by investing in the companies best adapting to the new world.

*The article referenced requires a paid subscription to WSJ. Please contact us for further details.

** The information provided should not be interpreted as a recommendation, no aspects of your individual financial situation were considered. Always consult a financial professional before implementing any strategies derived from the information above.