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E-Scoring: What it Means for Consumers in a 'Big Data' World
As computers crunch massive amounts of information from increasingly linked databases around the globe, new patterns and insights are emerging from the now giant-size networks.
That's the underlying concept of Big Data. Naturally, the world of business is putting this way of looking at information to work.
One of the things they're learning is that individual pieces of customer data, traditionally separated into numerous and unconnected databases, can now be brought together and analyzed to develop a whole new picture of how people spend.
They're calling the composite an e-score. With it comes a certain value, and a certain set of challenges.
The E-Score Defined
Instead of looking at just the usual consumer credit-related data points--assets, liabilities, and debt-payment history--companies such as eBureau in Minnesota include billions of records and tens of thousands of variables in their algorithms.
The e-score that emerges--the New York Times reported on August 18, 2012, that it's often a 0-99 range--incorporates what a consumer does for a living, how much they make, what their home is worth, what they like to buy, and so on.
eBureau's literature, available online, describes more than 25,000 variables that are brought into play during the process. And these names are valuable. According to the Times, these clients pay up to $0.75 per customer score.
The Post E-Score World
And so, the future of the e-score is here. With it, debates have developed about what the metric means for consumers and companies.
For example, if you're an advertising agency or a marketing department: How do you build an ad campaign that targets just the kind of consumers that an e-score might help you to identify?
Will consumers be treated unfairly, when they're seeking, say, a real estate agent, because their computer-measured value is lower or higher than that of another potential client?
And to some, e-scores threaten to stray into credit-reporting territory--potentially plumbing financial data to which laws have traditionally limited outsiders' access.
Entrepreneurs such as Gordon Meyer of eBureau say that such concerns are already reflected in the score algorithms, however, so e-scores shouldn't compromise fair treatment of consumers or the law.
That's not enough reassurance for some, such as justice-access advocate Richard Zorza, who has blogged about regulation of this new industry. On the other hand, Zorza acknowledges a possible silver lining: The e-score data could also help focus government assistance on those in need.