Data mining doesn’t always get the best reputation. Scandals like the Cambridge Analytica exploitation of Facebook data that came to light in 2018 have impacted consumers’ views of data mining and similar processes. However, what goes understated is that there are plenty of ethical ways to use data mining to improve customer satisfaction, service offerings, and even your business’s credit score.
But how can data mining be ethical? And how might its use impact a business’s credit score? In the course of data collection and implementation, ethics are your key to long-term success. That’s because an ethical approach to data mining balances benefits with risks to more effectively enhance business potential.
Start by understanding what ethical data mining is, then use these strategies to improve your financing opportunities and reputation.
What is Ethical Data Mining?
The modern economy runs on data. Big data, or packages of data too vast for any human to process using conventional means, inform and inform on customer trends and so much more. Data mining, then, is the process of exploring and assessing these massive data sets to produce informative patterns and actionable insights.
Data mining is more or less interchangeable with many of the other data science and analytics fields that inform business intelligence. It is the means to an end, a process that starts with identifying a business objective and exploring the means to accomplish it. That said, data mining is a tool, neither inherently good nor bad.
So what does ethical data mining entail? Simply put, ethical data mining is a do-no-wrong approach to harnessing and applying data-driven insights.
We’ve all seen examples of businesses that apply marketing data in ways we would rather they didn’t. From those times you notice your phone listening in on your conversations to scandals like the Facebook/Cambridge Analytica incident, there are times when your information is used clearly outside of your intentions and/or best interests.
Instead, ethical data mining is an approach to empowering a business with data without sacrificing integrity or customer trust. It puts the focus on the customer and improving their overall experience without tricking them or selling them short.
By applying ethics to all your data mining endeavors, you can produce a range of important business benefits. Among these is an enhanced business credit score.
How Data Mining Can Improve Your Business’s Credit Score
Every adult maintains at least a passing concern for their individual consumer credit score. These numbers are vital to the way that public and private institutions assess our ability to borrow and repay funds. Similarly, businesses maintain credit scores that impact both their ability to draw on funds as well as their brand reputation.
What does a business credit score consist of? A range of variables impacts your business’s credit rating. These include
- Length of time in business
- Number of borrowing inquiries
- Number and size of accounts
- Payment history
- Debt-to-income ratio
As you can see, these factors are not much different at all than those that impact personal credit ratings. Similarly, improving them requires careful calculation, precision, and consistency. Too much debt or missed payment can set your business credit score back. But where does data mining come into play?
Data mining is a means of innovation. It exists to optimize efficiency in the workplace. Even Human Resources departments can benefit immeasurably from the applications of careful and ethical data mining. That’s because data gathered in the workforce can be used to support workers, improve safety, and streamline efficiency at just about every level. In turn, workers gain the benefits of reduced burnout and more satisfying jobs.
For instance, employee burnout has been found to increase business healthcare costs by $125-$190 billion every year. These are costs that will undoubtedly impact your bottom line and your ability to pay bills and debts on time.
Instead, businesses can supplement their workforce with data-driven insights. Since investing in your people is one of the most valuable business decisions you can make, exploring employee pain points and challenges through data mining is just smart business. The improvements to employee healthcare costs alone can support a higher business credit score.
Ethical data mining allows you to collect and apply actionable strategies with transparency and care for optimal business results. This means not only a more financially sound business but a more trustworthy one as well. The implications of this stand to improve your credit score through a variety of efficiency gains.
Ethical Data Mining in Financial Efficiency
An ethical approach to business is inherently one capable of lasting longer. That’s because consumer trust is essential to longevity. A break in this trust through unethical activities can cost you millions in everything from legal settlements to lasting reputational damage. Here are some statistics that demonstrate the value of ethics to financial efficiency and business credit:
- Organizations lose an average of 5% of revenues to unethical behavior.
- Unethical behavior causes losses of $7 billion worldwide each year.
- Companies with weak ethical cultures have 10-times higher rates of misconduct than those that prioritize ethics.
That said, your use of data can help mitigate these losses. But only if it remains ethical. Ethical data mining supports workers by using their data to improve working conditions. In product and service optimization, it focuses on producing real positive value in the lives of customers. In supply chain and business administration, it enables waste reduction and greater sustainability.
Data-Mining for Ethical Business Success
All these benefits are possible because of the transparency inherent in data mining. This process reveals the facts, then business leaders can use these facts to improve their operations. Each improvement comes back to a boosted business credit score and a business model capable of greater longevity in the tides of public opinion.
Embrace data mining as a means to enhance your business model. Then use ethics to ensure your actions don’t alienate or mislead consumers. When ethics are applied to the power of big data, everybody wins.
By Indiana Lee, BOSS contributor