Algorithms for the War on the Unexpected
Technology Review has an article, “The Technology That Toppled Eliot Spitzer.” What jumped out at me was the explicit statement that strange is bad, scary and in need of investigation. Bruce Schneier is talking a lot about the war on the unexpected, and this fits right into that.
Each category is analyzed to determine patterns of ordinary behavior. Every single transaction by customers in these groups, and even patterns of transactions stretching back as far as a year, are then scrutinized for evidence of deviation from this norm using measures such as the number, size, or frequency of transactions, among others.
When “not behaving normally” is considered grounds for investigation, there’s an inevitable chilling effect. The willingness of people to do new, exciting things is reduced by the risk that they’ll get on some financial blacklist, and be unable to buy a house or a car.
(Via Paul Kedrosky)
I dislike the way the article conflates fraud detection and money-laundering detection. If my bank grovels through my transaction history to prevent fraud in my name, that is a benefit to me (assuming they protect the database of historical transactions, of course). If they do the same groveling to file a SAR, the benefit is dubious.
Money quote from the article (emphasis added):
“This might be a privacy advocate’s nightmare, but it helps keep banks safe from fraud and regulatory fines.”