So many of today?s businesses rely on digital technologies to, well, do business. Every click, transaction, and read receipt generates so much digital exhaust that we?re floating in a sea of data. But, we?re missing out on some of the most important stuff because of data blind spots.
While almost every organization does their best to collect every drop of data coming their way, so many are either completely blind to the data they need, or they lack the proper collection mechanisms.
These types of data blind spots can lead to negative business impacts. Such impacts can range from social faux pas (like sending a letter to a deceased member, thereby upsetting their family) to financial risks (like penalties from the Department of Labor for losing track of vested retirement plan participants). While the severity may vary, none of it is good for the bottom line.
So, what can organizations do to minimize their risk? We think the answer lies in staying proactive and continually massaging your existing data to look for life events. I know what you?re thinking: ?Easier said than done, my friend, because my IT team isn?t equipped for that.?
Before we jump to conclusions, let?s look at a few examples of augmenting existing data to reduce risk.
Dead men tell no tales, but they really should.
Imagine that your company is a cruise line. Marketing has cooked up a communication program for their new vessel, the ?Alive.? For a limited time, past cruisers can ?Feel ?Alive?? and book at a reduced rate. Your company sends a colorfully vibrant mailing campaign to all your past cruisers. The only problem is that 2% of your past cruisers are deceased and haven?t been removed from the mailing list. You can guess the result: next of kin are posting pictures of your mailing on Facebook with captions like: ?Dad hasn?t felt ?Alive? in 3 years,? and ?Thanks for reminding me about my dearly departed Peepaw!?
How were you supposed to know that Peepaw was dearly departed? It?s a blind spot, for sure, but there may be a way to avoid these types of blind spots by adding more input sources–kind of like the proximity sensors on your car that tell you when you?re about to back into your garbage can ? again.
Being proactive, the cruise company could have taken their mailing list and run it against a death record system. The process would have flagged the deceased cruisers? records. The company would have been able to pull those records out of their system and save on printing, mailing, and a boatload (pun intended) of grief.
There are pay-as-you-go services out there that can perform this function for you.
Johnny Appleseed, Please Report To Your Plan Sponsor
Imagine that you work for a retirement services company. Your job is to manage retirement contributions and help people build their nest egg for the day when they can say, ?Take this job and shove it.?
Johnny Appleseed has been a rocket scientist for Acme Nucleonics for 30 years. Over those 30 years, he has made a fortune in Bitcoin and moved to a hidden underground bunker–location undisclosed to you. The problem is that Johnny is a fully vested retiree now, and the checks you keep sending to him for his required minimum distribution (a.k.a. the amount you must withdraw from your account each year) keep getting returned to sender.
The Department of Labor does not like this–not one iota. In fact, they?ve put forth a set of guidelines for plan sponsors, administrators, and qualified termination administrators for how they should locate missing plan participants or beneficiaries. Want your eyes to bleed? Read it here: https://www.irs.gov/retirement-plans/missing-participants-or-beneficiaries
The DOL wants you to:
- Send a notice using certified mail
- Check the records of the employer or any related plans of the employer
- Send an inquiry to the designated beneficiary of the missing participant
- Use free electronic search tools
Unfortunately, this is costly, time-consuming, and frankly–counterproductive. How were you supposed to keep track of Johnny Appleseed and his underground bunker? Well, you had tools in place to collect a change of address–but Johnny was too busy mining Bitcoin and launching rockets. He neglected your collection mechanism.
Being proactive, your company could have taken the list of plan participants and run it against a number of data feeds. Let?s see … we could have used LexisNexis, the USPS National Change of Address, or even credit card data to look for changes in address anywhere on this planet (or under it).
Some of these options are more expensive than others. Ultimately, the problem isn?t so much cost as a cross-section of cost and risk. Does your company want to bring in Experian data and maintain the additional IT bandwidth to batch this process every month? Do you really want to integrate with LexisNexis?
What Should You Do?
Data, just like the people that it describes, needs a checkup every once in awhile. Building a list of data points that can be cross-referenced and checked at regular intervals (monthly, quarterly, bi-annually, etc.) can have a positive impact on reducing both social faux pas and financial risk.
In this post-GDPR world, it should be a priority for every business to balance the quality of their data with the privacy of their constituents, while trying to avoid data blind spots. But, there are ways to automate the data check-up process so that you can identify data changes that impact your business.
Regardless of whether you bring the additional data sources and processing in house, or find a trusted partner that can perform the analysis on your behalf, your data needs a checkup.
We are working on a pilot program where companies can submit their lists for an automated data checkup. The encrypted lists, uploaded through secure FTP, will be cross-checked for change of address, death, and identity verification. The file will be updated to show the appended data and returned to the company.
If this sounds like something you are interested in, give us a shout. We are HIPAA- and SSAE 16-compliant, insured by Lloyd?s of London, and have never had an incident or issue with data loss or leakage.