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Jon Jacobson is CEO of privacy-preserving data collaboration platform business Omnisient. As part of my series on how businesses—specifically, the financial services industry—can leverage insights on consumers' grocery shopping habits for risk management and precision marketing, I'll explore the ethical and practical challenges. Beyond benefiting businesses, grocery data has the potential to empower consumers and contribute positively to society by addressing challenges like financial inclusion to enable underserved communities access to credit.
Responsible data practices ensure these benefits extend beyond business interests to create a broader societal impact by preserving consumer trust. The consequences of using consumer data without consent or prioritizing business benefits over consumer benefits are significant. Two high-profile allegations highlight these potential risks: • General Motors: GM faced regulatory action in January 2025 after being accused of collecting sensitive consumer data through its Smart Driver program without proper disclosure.
The Federal Trade Commission claimed GM sold this data, which included geolocation and driving behaviors, to consumer reporting agencies and used it to adjust insurance premiums or deny coverage. • Allstate's Arity Subsidiary: The state of Texas sued Allstate in January 2025 after accusing Arity of collecting driving data via smartphone apps without sufficient consumer consent. According to the suit, this data was then used to increase premiums or deny coverage.
It's vital to be transparent, gain explicit consent and ensure that data usage prioritizes consumer benefit over solely driving business objectives. While consumer consent is critical, not all initiatives that touch consumer data require it. When data is fully anonymized and aggregated, it can be used to build AI models that enhance financial services without reidentifying individuals.
For example: • Training AI Models: Banks and insurers can use anonymized grocery data to develop predictive models that assess financial risk without linking the data back to individual consumers. • Market And Trend Analysis: Financial institutions can analyze broader spending trends to refine underwriting models and create new financial products without the need for consent. Consent is only required when reidentification occurs or data is used for direct decision making that affects an individual, such as credit approvals or insurance pricing.
Grocery data provides behavioral insights that enhance credit scoring and consumer segmentation due to its universality, depth and recency. One of Africa's largest grocery retailers is a client of ours, and it allows banks to access consumer data only with explicit consent in cases where bureau data is insufficient to accurately score the applicant. This ensures shopping data is used exclusively to improve access to credit where traditional methods fall short.
Similarly, a leading African health insurer incentivizes healthy shopping habits with cashback rewards and discounts instead of penalizing unhealthy behavior. This approach fosters trust and motivates positive consumer actions without punitive measures. To maximize grocery data's value while mitigating risks and maintaining consumer trust, financial institutions should: Grocery data should be a supplementary resource, particularly when traditional credit data is unavailable.
Its purpose is to enhance credit assessments, providing additional insights to improve scores for underserved consumers without negatively impacting those with existing credit records. Encourage beneficial habits with financial rewards. A health insurance company can offer cash back and discounts for healthy shopping to build trust and incentivize behavior that benefits both businesses and consumers.
Transparent consent mechanisms should allow consumers to opt in with a full understanding of how their data will be used. Institutions must communicate how consumer data will be used in clear and precise language. Offering clear benefits, such as improved credit access, while providing easy opt-out or opt-in options, empowers consumers to take control of their data.
Grocery data integration must avoid reinforcing biases. For example, interpreting budget shopping as financial instability could unfairly penalize lower-income consumers. Algorithms should be rigorously tested and audited to ensure equity across demographics and income levels.
Again, grocery data should complement—not replace—traditional credit data or scoring methods to maintain fair decision making. Successfully implementing grocery data strategies involves: • Privacy-Preserving Data Collaboration: Technologies like data collaboration platforms with built-in AI tools allow banks and retailers to securely analyze overlapped datasets without exchanging raw data. This ensures privacy and data security throughout the process.
• Consumer Education: Educating consumers about the benefits of sharing grocery data fosters trust and increases engagement. Highlighting success stories demonstrates the tangible advantages of data-sharing agreements. To unlock grocery data's full potential, financial institutions must prioritize ethical considerations alongside business benefits.
By focusing on consent, transparency and consumer benefit, they can drive growth while maintaining trust. Avoiding missteps underscores the importance of responsible data stewardship. While this article is based on our experiences and insights, every business operates in a unique regulatory environment.
We encourage financial leaders to work closely with legal and compliance teams to ensure their data strategies align with the latest regulations and best practices. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?.
