Where a data gap exists, social media and other alternative data sources can open the door to previously excluded potential customers. How realistic is it to close the door on its use?

Earlier this month, Facebook blocked Admiral car insurance’s plans to use young drivers’ posts and ‘likes’ to influence their insurance quotes.

The Facebook user would have had to give permission for the insurer to access the data.

Arguably, Admiral’s plan could have resulted in 17 to 21 year olds receiving a more individualised quote that was more reflective of the risk, or lack thereof, they posed. Admiral reportedly claimed its computer analysis of the Facebook data would be used to create “a reputational track record in the absence of a driving history”.

As with all financial risk assessments, history impacts risk level; young drivers don’t have one so they have nothing to point at to argue their case as a responsible driver – and a low risk for insurance - and therefore deserving of a lower premium.

As a collective age group, young drivers are saddled with high premiums – on average over £1,000 a year for 17 to 22 year olds in the UK despite shopping around.

The Facebook data would only have determined whether or not Admiral would offer a discount on the premium.

Forward-thinking institutions recognising the potential in unstructured data can help turn the tide for the financially underserved. It’s worked in Kenya to good effect where car finance has been secured on the strength of Uber customer ratings. Is Facebook fighting a losing battle and how long will it be before we see more unstructured, online data being used to paint a more detailed picture of consumers?