Spurious but Plausible Big Data Analytics

I attended an Australian Information Security Association (AISA) event some time ago and was very pleased to hear what the impressive Chief Security Officer of the NAB, David Powell, had to say.

Reference: http://www.aisa.org.au/branches/melbourne/events/aisa-melbourne-branch-meeting-security-thought-leadership-from-david-powell-(1)/?ref=1383

Firstly, because it is the first time that I have heard a business spokesperson (as opposed to persons from the security sector) in Australia speak openly about the threats of information warfare and espionage as a business risk reality, a trend that I have watched develop over the last 8 years.

Secondly, because Mr. Powell enforced, not only the requirements, but also the terminology of warfare - intelligence - the ability to gather information and act appropriately and timeously.

It is all about the information - masses of it - 'big data'. The question is what will we do with all this information? According to the German Academic Gerd Gigerenzer: "Schools spend most of their time teaching children the mathematics of certainty - geometry, trigonometry - and spend little if any time on the mathematics of uncertainty. Statistical thinking should be taught as the art of the real-world problem solving", says Gigerenzer.

In his article, The Wiki Man, Rory Sutherland, writing for The Spectator, points out that the formulation of the question and the "presentation of the data affects our judgement by factor of thousands: from 0.04 per cent to 90 per cent". He warns that we need to be alert to this kind of error since computers and big data make it easy to generate spurious but plausible statistics on almost any subject.

Reference: http://www.spectator.co.uk/life/the-wiki-man/9147101/what-the-o-j-simpson-jury-didnt-know-and-schools-should-teach/

What interests me in the business context of these developments is the possible legal liability of executive management arising from a failure in due diligence and due care.