by Rich Edwards Jul 1, 2022

What we're reading - 07/01/22 Edition

The crumbling of the 3rd party data ecosystem, Meta and the CFPB, Apple's ATT play, and how it even effects national defense.

Rolling into the 4th of July like...

For this first Friday of July, the beginning of the 2nd half of 2022, and the beginning of a long weekend/vacation week, a few data-related reads this week to give you something to ruminate on (bonus for using a $2 word).

We are very bullish on the opportunity for community FIs to get ahead by leveraging their 1st party data. Whether in marketing, product design/delivery, or strategic planning, there are significant advantages to using proprietary data that only you have. In addition, systems relying on 3rd party data, like advertising cookies and data brokers, are being systematically dismantled or at least weakened. Organizations that fail to take steps to mitigate their reliance on 3rd party data will find themselves at a growing disadvantage soon.

Here are a few stories that show the growing cracks in the foundation of 3rd party data’s primacy. There’s regulatory risk, sleeping giants that own substantial parts of the rails to customers, and how even national defense is having to change many long-standing practices.

1. Meta and the looming threat of the CFPB

It’s no secret Rohit Chopra has an ax to grind with digital advertising platforms and Meta in particular. He’s been vocal about the insufficiency of the FTC’s $5 billion levy against Meta in 2019 (a sentiment seemingly shared by the market at the time). Kate Berry at American Banker runs down five ways Chopra, in his role as director of Consumer Financial Protection Bureau (CFPB), could chip away at their dominant position, particularly in the context of payments and consumer data.

The CFPB is working on a rule that will set the parameters around how much control consumers should have over their financial data. Chopra is extremely skeptical of technology companies’ motives though criticism of Facebook appears to be in a realm of its own. “This thirst for data has led the company to harvest intimate, personal details about tens of millions of Americans on a scale and scope that are almost unimaginable,” Chopra wrote of Facebook in 2019.

The rule is expected to place data aggregators and third-party vendors under the direct supervision of the CFPB. The bureau expects in November to release an outline of its data access rule, known as Section 1033 of the Dodd-Frank Act. The rule is expected to set standards that would allow consumers to give third-party companies access to their bank transaction data.

2. The tangled web of personal data and digital advertisers

Ben Thompson of Stratechery wrote an in-depth piece on the effects of Apple’s App Tracking Transparency (ATT) framework on digital advertising. After Apple’s bold moves in the payment space, Thompson looks at how this may play into strengthening their own advertising platform and the outsized role transactional data plays.

Personally Identifiable Information (PII) is like radioactive material: it’s very valuable, and can certainly be leveraged, but it’s also difficult to handle and can be dangerous to not just the users identified but to the companies holding it. The way Meta works is that its collective advertising base has effectively deputized the company to collect data on their behalf; that data is not exposed directly, but is instead used to deliver targeted advertisements that are by-and-large bought not by targeting specific criteria, but rather by specifying desired results: app installs, e-commerce conversions, etc. Everything user-related is, to the companies buying the ads, a complete black box.

What is frustrating about the debate about ATT, though, is that Apple presents itself as a representative of <individual rights>, with its constant declarations that privacy is a human right, and advertisements that lean heavily into the (truly problematic) world of data brokering, even as it builds its own targeting advertising business….

Yes, Apple tried and failed to build an ad network previously, but a big reason that effort failed is because Apple didn’t collect the sort of data necessary to make it succeed.

What has changed is not just Apple, but also the data that matters: when iAd launched in 2010, digital advertising ran like people still think it does, leveraging relatively broad demographic categories and contextual information to show a hopefully relevant ad; what matters today is linking an ad to a transaction, and Apple has positioned itself to have perfect knowledge of both, even as it denies others the same opportunity.

3. Personal data makes life hard for spys

Edward Lucas from Foreign Policy has a piece on the difficulties of espionage and national defense in a world with ubiquitous surveillance where a lifetime of personal data is only a search away and the changing attitudes and legalities of using PII.

A disabled man who has no bank account or mobile phone and requires round-the-clock care for his most basic and intimate physical needs is going to be invisible to the outside world. But he has a birth certificate, which can be used to build an identity for someone else’s undercover life. This practice raises profound ethical questions in an era when most people feel that those with disabilities have inalienable human rights. What may have been acceptable 20 years ago may seem outrageous and career-killing in 20 years’ time.

And so ends it for the week. Here’s to the fun of staying in a hotel on vacation this summer. Drop us a note with likes/dislikes at

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