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CMA Intermediate · Financial Management and Business Data Analytics · Introduction to Data Science for Business Decision-making

A bank in Pune uses a customer database containing names, mobile numbers and account balances to build a loan-offer model. To reduce ethical and privacy risk before sharing the data with an external analytics vendor, which step is most appropriate?

The appropriate step is to mask or remove personal identifiers and share only the fields the model needs. This follows data minimisation and protects customer privacy, while sorting, verbal assurances or keeping names and mobile numbers do not reduce the privacy and ethical risk.

  1. AShare the full data and rely on the vendor's verbal assurance
  2. BRemove or mask personal identifiers and share only fields needed for the modelCorrect
  3. CDelete all balance data but keep names and mobile numbers
  4. DShare the data only after sorting it by account balance

Explanation

Data minimisation and anonymisation or masking of identifiers protects customer privacy while keeping the analytical value. Keeping names and numbers retains the sensitive identifiers. Verbal assurance is not a control, and sorting does nothing for privacy.

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