
Second Measure (YC S15) analyzes credit card transaction data for investors - wyndham
http://www.businessinsider.com/second-measure-is-secret-weapon-for-investors-to-outsmart-each-other-2016-4
======
drglitch
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/](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-...](http://blogs.wsj.com/cio/2013/02/06/banks-using-big-data-to-discover-
new-silk-roads/)

While others just blatantly hide behind a ToS:
[http://www.wsj.com/articles/provider-of-personal-finance-
too...](http://www.wsj.com/articles/provider-of-personal-finance-tools-tracks-
bank-cards-sells-data-to-investors-1438914620)

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.

------
msellout
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...](https://www.wireless.att.com/businesscenter/solutions/mobile-
marketing/products/location-information-services.jsp)

------
wexxx
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...](http://www.wsj.com/articles/provider-of-personal-finance-tools-tracks-
bank-cards-sells-data-to-investors-1438914620)

------
shostack
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.

------
mbesto
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.bloomberg.com/news/articles/2015-01-22/capital-one-workers-
accused-of-trading-on-what-s-in-your-wallet)

[http://www.reuters.com/article/us-sec-capitalone-
insidertrad...](http://www.reuters.com/article/us-sec-capitalone-
insidertrading-idUSKCN0UR2KR20160114)

~~~
jsprogrammer
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.

~~~
mtanski
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.

~~~
jsprogrammer
>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).

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

~~~
jsprogrammer
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.

------
a_small_island
>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?

------
techthroway443
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...](http://www.bloomberg.com/news/articles/2015-01-22/capital-one-workers-
accused-of-trading-on-what-s-in-your-wallet)

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

~~~
swang
Do you mean this? [http://www.reuters.com/article/capital-one-fin-
insidertradin...](http://www.reuters.com/article/capital-one-fin-
insidertrading-idUSL1N0V02ZY20150122)

In which case, no.

