Second Measure (YC S15) analyzes credit card transaction data for investors | Hacker News Reader

Second Measure (YC S15) analyzes credit card transaction data for investors

businessinsider.com

50 pointswyndham14 comments

This treasure-trove of data has been producing quite a lot of drool at the C* level in major banks for quite some time.

Some are going with "its for the greater good and the children!": http://fortune.com/2015/05/21/jp-morgan-chase-big-data/

Some are being choosey with who they share with: http://blogs.wsj.com/cio/2013/02/06/banks-using-big-data-to-...

While others just blatantly hide behind a ToS: http://www.wsj.com/articles/provider-of-personal-finance-too...

Next time you're on any PFM-related site thinking "your transactions are secured with bank level encryption" means anything, think twice and take another look at who you're giving your transactional data to.

I'm only surprised they managed to get a good data source. MasterCard has been trying to sell prediction services while keeping their data internal. AmEx is likely to follow soon if they haven't already. This'll get really good once it is merged with cell carrier data -- what you buy, when, and where. Last I checked, the carriers were also trying to monetize while keeping the data "anonymized". Where you live, work, and hang out. Which allows inference of hobbies, who your friends are... Utopia!

It took some searching, but I found AT&T's location information services. Not sure exactly what this provides, but it seems to be selling your location, so we can provide timely offers when you're walking past your favorite store.

https://www.wireless.att.com/businesscenter/solutions/mobile...

The underlying data source for Second Measure is Yodlee. You can see a history of their data sales here:

http://www.wsj.com/articles/provider-of-personal-finance-too...

I think it was an A16Z podcast that touched on this recently.

Basically the issue is banks have a ton of data and would love to reap the rewards of the data of all the other banks for risk modeling, selling it, and other fun things, but nobody wants to give up their data asset.

Enter a middleman and suddenly all of these companies can provide anonymized data and wipe their hands of it while reaping the rewards of the output.

Something similar happened in the ad space with regards to cookie onboarding services like Liveramp.

Isn't this illegal? Capital One analysts did the same thing and got fined by the SEC for it:

http://www.bloomberg.com/news/articles/2015-01-22/capital-on...

http://www.reuters.com/article/us-sec-capitalone-insidertrad...

Many businesses are illegal. This appears to be insider trading and worse on a large scale. Its survival is probably dependent on how quickly it can buy-in regulators.

It's not insider trading as long as everybody can buy the dataset on comparable terms.

There are a lot of industry specific data providers that build / license datasets for resale. They then to be used the the industry and investors. Comscore and its competitors provide it online, Nilsen in TV. Mint in the personal finance space. These services exist in the airline space, oil / gas ... Everything.

I'm sure Chipotle would be just as interested at understanding the behaviors of their customers.

>I'm sure Chipotle would be just as interested at understanding the behaviors of their customers.

Chipotle would already have access to this information, that is what would make this scheme insider trading (assuming Chipotle doesn't publicly post transactions as they happen).

Chipotle knows where their customers went instead after the recent hickups? Or they know what are other places their customers shop at? Doubtful

Why would Chipotle know those things? Chipotle should know its real-time receipts (as should every business) and if others get those before Chipotle makes them public and trade based on those receipts, it would be insider trading.

If banks sell exclusive transaction dumps of non-public receipts and someone trades based on that information, it would be insider trading.

IIRC, they got in trouble for misappropriation. It was Capital One's data, not theirs. Capital One may be able to legally use their internal credit card data to make trades, but that's a murkier issue.

>Due to strict confidentiality agreements, Second Measure can’t say exactly where it receives its data from, but says it works with a massive quantity of anonymized consumer spending data, and that this data makes up a representative selection of 2-3% of all credit card transactions.

Well... any likely guesses? Are MC, Visa, Banks annonymizing their data and selling it off?

Are these the same two people who got fired from Capital One's Fraud Department because while working there they were using the Capital One database to make investment decisions?

Edit: nevermind, looks like it was these two: http://www.bloomberg.com/news/articles/2015-01-22/capital-on...

Seems like these two should have been offered a promotion in Captial One's portfolio management division instead!

Do you mean this? http://www.reuters.com/article/capital-one-fin-insidertradin...

In which case, no.

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