Data Privacy: Your Greatest Competitive Advantage
Data privacy has become a top priority for businesses over the past few years. As penalties for improper data use and storage continue to escalate, the typical motivator for businesses has been to avoid the regulatory consequences of non-compliance. While this may be seen as a reasonable commercial approach, many businesses fail to realize that ensuring data privacy for consumers is not just a box to check off to mitigate the risk of financial consequences. The fact is, building trust with consumers by ensuring their privacy may just be your next greatest competitive advantage.
With big-tech continuously in the spotlight for data misuse — such as Facebook’s Cambridge Analytica scandal — individuals are becoming more aware of how their data is being collected and how it’s being used. As a result, many are starting to question who they share their personal data with and the types of businesses and platforms they subscribe to. The public scrutiny from major data breaches and increasing awareness of the potential to misuse an individual’s personal information provides an opportune time for consumer-facing platforms to capitalize on an opportunity to differentiate themselves from existing industry players.
So how exactly can this be done? In order to gain trust with consumers and build a competitive advantage, companies should consider implementing data collection best practices. Such practices that are based on asking only for data are considered essential for delivering a given product or service whilst ensuring a clear purpose is defined and disclosed publicly for collecting this information. In addition to this, companies should craft and engage in an ongoing data management strategy to monitor and track all the data in a collection to help guarantee it stays protected.
Implement Privacy Policies
The first step companies can take to gain consumer trust is to present privacy policies that are simple and easy for the everyday individual to comprehend. Apple’s latest iOS 14.5 update is setting a major precedent by bringing data collection of various app developers into the public spotlight. The App Tracking Transparency framework requires app developers to explicitly seek permission when collecting location and other tracking-related data on a user device. As such, the user can choose to decline such a tracking request, therefore preventing unwanted data collection.
Consumers have also fallen victim to specific targeted ads and recommendations, which at times can be helpful and other times may be interpreted as being invasive. Although social media platforms owned by big tech often offer free services and upgrades, a consideration that such platforms must consider as a lead differentiator in the future is ethical data use and handling practices and policies. Lastly, companies should also commit to greater due diligence by resurfacing and reminding users on a regular basis of the privacy terms and ongoing changes. This recurring communication and transparency go a long way in building trust.
Gather Data For A Purpose
Companies must gather data with a clear purpose. Gone are the days when organizations collect everything they can and then do with the data as they please, including storage in perpetuity long after the individual ceases being a customer or user. This now is a two-way conversation with the consumer on why the data is needed and how the business is going to use it in a transparent and ethical way to deliver the product or service promised.
In fact, a recent Experian survey reports that 70% of consumers would share more data if there was a perceived benefit to them. As data continues to build competitive advantages for businesses, it is clear that those organizations that can show real benefits whilst honoring and respecting the individual’s privacy will be better positioned to compete using this as a differentiator.
So what exactly do these perceived benefits look like? Ultimately, businesses should focus on gathering data in a responsible way that mutually benefits them and the consumer. For instance, instead of collecting data for the sole purpose of selling more products and services to the consumer, collecting data in a responsible way allows for an easier and more tailored experience. Such experiences can be delivered in a manner that the consumer accepts and expects (through these outlined policies) to truly deliver a better experience for them whilst staying true to the trust that the individual has placed in the organization.
Privacy Starts With Understanding The Data You Have
The above actions ultimately rely on a strong data management strategy to discover, monitor and track all data collected to ensure its security. With the significant volumes of data that businesses consume each and every day, tracking where all data relating to individuals reside has proved to be a challenging and inaccurate process when approached manually. However, in recent years, data discovery has emerged as a mainstream technology relied on by small and large organizations to find and remediate personal and sensitive information, whether stored across servers, desktops, email, databases or in the cloud.
More specifically, data discovery is a process that allows businesses to know what types and jurisdictions of data are stored across various sources and provide deeper insights into security and privacy initiatives by establishing a complete breakdown of personal and confidential data. By detecting these various data patterns, organizations can then make evidence-based decisions to drive strategies relating to consumer privacy and ensure data is being held in a responsible manner. Without a holistic view of all data stored about individuals, setting standards and policies for data privacy and consumer trust is a futile exercise.
The Bottom Line
Data has become the foundation of every business, and it has revolutionized every industry. It will be the driver behind finding future growth opportunities; however, it is also an organization’s greatest risk and potentially one of its biggest liabilities, especially if mishandled. By implementing effective data management strategies to locate and secure all the data across your organization, you can begin to build trust and loyalty with your customers, ultimately reaping the benefits of privacy as one of the greatest competitive advantages.
[NOTE: Originally published in Forbes Technology Council]
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