There’s no doubt that many of today’s digital consumers are increasingly concerned about how their data is collected, managed, and secured online. In fact, our recent research revealed that 85% of UK consumers are concerned about the privacy and security of their online data, and three quarters think that companies are not sufficiently transparent about how that data is handled.
In general, the pressure is building on website and app operators to raise their game. With GDPR penalties punishing breaches of privacy, consumer awareness about the nature and levels of personal data continues to grow. Brands that fail to understand this face the very real prospect of losing customers to rivals that do more to protect their sensitive data, disclose what information they need consumers to share, and why.
Dealing with Data Privacy
Changing consumer attitudes around the value of their data and their rights to privacy are proving challenging for businesses that have identified the inherent value in collecting demographic and behavioural information. In particular, there is a growing sense that companies simply don’t need to collect so much personal data and justifiable concerns that data isn’t always safe and secure. Indeed, over 80% of UK consumers say they would stop doing business with a company if it suffered a data breach that exposed their personal information.
The evidence backing up the importance of digital trust is growing all the time. IDC, for instance, believes that by 2025 more than a third of organisations will have replaced Net Promoter Scores with digital trust indices. And looking at the potential for bottom-line impact, Meta recently revealed that the changes in privacy made by Apple last year will cut the company’s earnings in 2022 by $10 billion (£7.95 billion). With Google also planning more stringent privacy rules, it’s clear that companies can no longer sit on the sidelines while the privacy debate rages around them.
The problem is, delivering the integrated and customer-focused digital experiences today’s customers expect depends to a major degree on utilising their personal data. This begs the question, how can convenience be balanced with privacy and security in a way that is commercially and ethically sustainable?
Give Choice and Control Back to Consumers
There’s no doubt that many consumers value the choice of opt-in/out settings on mobile apps and websites. For companies that would like – and even need – to collect data, but do so in an appropriate and privacy-friendly manner, consent and granular permissions are the base foundation stones for building digital trust.
From the consumer perspective, research shows that over a quarter (27%) say they would opt into app tracking given the choice, with a further 50% saying they’d allow it if given the option to opt-out at any time they choose.
It’s crucial that organisations disclose why they are asking customers for their data, and do so with clarity because today’s savvy consumers can quickly spot a ‘check-box’ exercise that pays lip service to data privacy compliance, and may refuse permission as a result. However, setting out the goals of the data collection process is more likely to result in a faster, more personalised service. The better the CX, the more likely customers are to provide some data in return.
Focus on Customer Intent
There are many organisations out there that have amassed huge volumes of historic and highly personal customer data that today is no longer relevant or ethically appropriate. This creates a number of problems, not least if that data is exposed or stolen. To balance ethical and commercial considerations, however, the focus should be on some key questions: why are customers using the mobile app or website – what is their intent? In addition, what are their primary interactions? What real-time data points and insights are required to meet business and customer expectations in real-time and deliver against priorities?
Build Better Tech
Despite the current challenges around the ethics of privacy, companies currently also have an ideal opportunity to build consumer trust. For instance, making maximum efforts to ensure debit and credit card details remain secure can build confidence that if their highly sensitive personal data won’t be put at risk, then consumers should feel safe in sharing additional information to help brands improve their proposition.
This will require organisations to focus on technical innovation, with today’s API management platforms, for instance, making it possible to deliver excellent, privacy-centric experiences at scale, without falling short of their expectations. In practical terms, API management platforms streamline the delivery of digital services, while also ensuring that the right security policies are in place to protect sensitive data and applications across the interface, access and data levels.
Ultimately, organisations should be aiming for a win-win where data security, privacy and the delivery of a frictionless user experience work hand-in-hand. In this context, consumers will get the privacy and security they are looking for, while digital strategies can still benefit from the insight that only consumer data can deliver. Those organisations that address these issues sooner rather than later will be ideally placed to succeed in the digital economy where consumers are becoming more empowered all the time.
By Brian Pagano, Chief Catalyst and VP at Axway.