In a post-GDPR world, companies need to communicate clearly how giving up data can benefit end users
Many businesses need data to improve their products and services. However, collecting this data is becoming more complex, thanks to new privacy laws like the EU’s General Data Protection Regulation (GDPR). This creates a tension for companies, which venture capitalist and former Wall Street securities analyst Mary Meeker labelled the “privacy paradox.”
GDPR came into force in May 2018 and is globally recognised as the gold standard for data regulation and protecting consumer privacy rights. Among other things, it requires businesses to seek fully informed and valid consent before capturing and using a customer’s data. Non‐ compliance can result in hefty fines. Most recently, Google was fined a record €50m (£44m) by French data protection watchdog CNIL for failing to provide users with transparent and understandable information on its data use policies.
Regulation is understandable and inevitable, but as Meeker suggests, it can be challenging for businesses to navigate. In fact, many companies wrongly believe that GDPR is designed to stop them from processing personal data, says Steve Holt, head of cyber solutions for financial services at professional services firm EY.
“Many organisations view it as meaning they can’t use data to be innovative, but that is wrong; collecting data [under GDPR] is fine if companies are clear and transparent about what it is being used for, both internally and/ or when sharing it with third parties,” he explains.
Company privacy notices should therefore be easily located and understood; without transparency, it is difficult for individuals to have trust in organisations, Mr Holt notes.
GDPR has created awareness among consumers about their data, with people often taking steps to protect their personal information when the benefits aren’t clear. According to a 2018 UK survey by market intelligence agency Mintel, 71 per cent of respondents said they actively avoid creating new accounts with companies because they are worried about sharing their personal data.
The good news, however, is that many consumers are open to exchanging their personal information for services they actually want. According to The Loyalty Report 2018 from customer engagement specialist Bond Brand Loyalty – which surveyed consumers about brand loyalty programmes – around 87 per cent said they are open to having various details of their activity and behaviour watched, monitored, and tracked in exchange for access to personalised rewards or engagements.