Member Article

Is wearable tech creating a data time bomb?

The company that made your smartphone is no longer a hardware manufacturer. It has become adept at harvesting and managing data from its users, too. Every device has a series of sensors, as well as a user login and an account where data is stored.

For manufacturers of wearable technology, there’s value in knowing how we spend our time: where we go, what we do, and how we like to exercise. Companies like Nike prove how this works.

The First Nike Device

Nike first attempted to harvest data from its customers in the late 1980s. It launched the Nike Monitor, a wearable device that cost $225 and used “ultrasound burglar alarm technology” to record data on the runner’s pace and distance. The sonar pedometer was a flop, but it paved the way for Nike+, a service that would follow 20 years later.

Today, Nike+ collects data from a range of devices, and has more than 28 million users worldwide. It is a software platform, accessed via a series of apps. Users voluntarily connect and upload their statistics to the cloud.

Now, consider the fact that the Nike FuelBand, a wearable tracker, is widely considered to be a flop. In fact, Nike has shelved its hardware to focus on data. To understand why Nike is more interested in Nike+ than the FuelBand (or the Monitor), we need to look closely at the relationship between data and consumer behaviour.

Integrating Data

In the mid-2000s, Apple was selling a sport kit to integrate Nike+ into its iPods, and launched a branded version of the iPod in 2006. Thanks to the integration of music data and pedometer readings, Nike was able to determine users’ favourite running songs from its app.

Six years ago, Nike had data on running trends across entire continents, and it understood the way seasonal weather affects users’ habits. Fitbit, Jawbone and other companies would later develop their own version of the fitness tracker, a market which is growing in value every month.

Fitness data is a goldmine for all kinds of industries, from diabetes research to health insurance and the provision of essential services. For companies like Nike, data from a fitness device helps them to develop new shoes for particular activities, market those shoes in the right continents, and focus marketing efforts in the right places at the right time. Apple wants to know which songs runners like to listen to, as they have an interest in selling mp3s. Let’s not forget that Tim Cook, the CEO of Apple, is a Nike board member, and has been for almost a decade.

As you upload your latest run data to Nike+, you upload all kinds of metadata about your location and habits that will shape the products and services of tomorrow. How many companies have access to that data, and can you be sure that it’s accurate?

Trust and Data

While all of the data generated by wearables can drive positive innovation, the recent TalkTalk hack is a timely reminder of how easily things can go awry. TalkTalk’s customer database was hacked by a teenager; the data was allegedly incomplete, but unencrypted.

By wearing a fitness tracker, or a smartwatch, we are contributing to a huge data silo in the cloud, and that silo could be shared between different companies with our consent. Companies like Nike are starting to step back from hardware development and focus on harvesting and managing data, using services like Nike+ as a platform that other providers can tap into. When you buy a scale from Fitbit, or a smartwatch from LG, your statistics and usage patterns are shared with third parties that integrate with the service.

If we are to continue offering up our data using wearables and cloud technology, we need to trust the gatekeepers that access it, and there needs to be standards in place to remove risk to businesses and consumers. In TalkTalk’s case, stolen addresses and phone numbers have lead to identity theft and a public enquiry. Even if there is no hack, inaccurate data and duplicated accounts can cause poor reporting, and if the data was ever used for a life or death assessment of health, we need to know that it is accurate and up to date.

Your Responsibility For Data

The smartwatch has taken the baton from fitness wearables, from the Pebble in 2002 through to the Apple Watch in 2015, as well as devices made by Samsung, Motorola, Sony and others. According to KPMG, 74 per cent of us are happy to wear these devices. They can exchange data with sensors around us using Bluetooth and WiFi, and offer a convenient way to interact with our environment through Internet of Things (IoT) devices.

Already, health insurers are offering discounts to wearers of smartwatches, in return for access to their activity statistics. In the US, 68 per cent of consumers say they’d exchange their data for lower health insurance premiums. In Canada, the data from a woman’s Fitbit wearable tracker was used in court in place of a doctor’s examination.

But 41 per cent say they would be uneasy about sharing health data with their boss.

Our data is already being collected through our use of the web and our smartphones. It’s not a question of whether our personal data will be used, but when, and whether the companies involved are taking the right steps to ensure data quality and effective management. As data quality experts, it’s our responsibility to ensure that data is cleansed, deduplicated and held according to the law. Personal data is no longer anonymous, and the Internet of Things will only muddy the waters as our data silos get bigger and bigger.

We all have a responsibility to take data seriously now, and put measures in place to ensure that data is used ethically. Companies like Nike have proven the value of data, and the need for trust from the users who opt in to its collection.

This was posted in Bdaily's Members' News section by Martin Doyle .