profiling
What It Means
Profiling is when computer systems automatically analyze personal data to make predictions or judgments about someone - like predicting if they'll buy a product, qualify for a loan, or pose a security risk. It's essentially using data patterns to create a digital 'profile' that assumes things about a person's future behavior or characteristics.
Why Chief AI Officers Care
Profiling creates significant liability exposure since it can lead to discriminatory outcomes, regulatory violations (especially under GDPR/privacy laws), and reputational damage. It also requires robust governance because automated profiling decisions directly impact customers and can expose the company to lawsuits if the profiling is inaccurate or biased.
Real-World Example
An e-commerce company's algorithm automatically analyzes purchase history, browsing patterns, and demographic data to predict which customers are likely to default on buy-now-pay-later offers, then automatically denies payment options to those flagged as high-risk.
Common Confusion
Leaders often think profiling only applies to obvious cases like credit scoring, but it actually includes common business practices like personalized marketing, dynamic pricing, automated customer service routing, and even basic recommendation engines that predict user preferences.
Industry-Specific Applications
See how this term applies to healthcare, finance, manufacturing, government, tech, and insurance.
Healthcare: In healthcare, profiling involves analyzing patient data to predict health outcomes, treatment responses, or care needs ...
Finance: In finance, profiling involves analyzing customer data to assess creditworthiness, detect fraud, determine insurance pre...
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Includes:
- 6 industry-specific applications
- Relevant regulations by sector
- Real compliance scenarios
- Implementation guidance
Technical Definitions
NISTNational Institute of Standards and Technology
"‘Profiling’ means any form of automated processing of personal data consisting of the use of personal data to evaluate certain personal aspects relating to a natural person, in particular to analyse or predict aspects concerning that natural person's performance at work, economic situation, health, personal preferences, interests, reliability, behaviour, location or movements."Source: GDPR
"“Profiling” means any form of automated processing of personal information, as further defined by regulations pursuant to paragraph (16) of subdivision (a) of Section 1798.185, to evaluate certain personal aspects relating to a natural person and in particular to analyze or predict aspects concerning that natural person’s performance at work, economic situation, health, personal preferences, interests, reliability, behavior, location, or movements."Source: CCPA
"Measuring the characteristics of expected activity so that changes to it can be more easily identified."Source: CSRC
Related Terms
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