There is no such thing as a free lunch, which is a well-known fact. Your data is the entry fee for services like Twitter, Google, Facebook, and every other free-to-use software.
Data collection has expanded into a major industry. Global organizations have invested enormous sums of money in tools that help them collect and organize this data more effectively, and the scale at which they are doing so is exponentially growing.
These businesses make money by selling advertising, gathering a ton of user data, and using that data to create algorithms that can target ads with amazingly accurate accuracy. They can better understand their customer base and anticipate upcoming trends because of this, which is a very good reason.
The Data Privacy Proxy War
In reaction to these shifts in public opinion and the regulatory environment, organizations are placing a greater emphasis on data privacy.
Perhaps the best example of this is Apple, which in recent years has made numerous public commitments to user privacy, built data protection features into many of its products and services, and positioned itself as an alternative to competitors who will mine and exploit your data.
For instance, Apple recently declared its intention to formally ask users if they still want to consent to Facebook’s data collection. Apple will simply cut off Facebook’s access if they refuse.
Source: Mirene Global Consults
The social network has vehemently opposed this action, claiming that it will make it impossible for small businesses to precisely target advertisements on its platform and that Apple’s warning lacks the necessary context for why the data is being collected.
Imraan Kharwa, group CISO for the South African travel agency Tourvest, asserts that “that ongoing war is only going to spread.” Businesses that position themselves as privacy-friendly, privacy advocates, or privacy-focused will have an advantage because there will only be more of them.
Privacy policies should pass the user test, not the lawyer test
Every business that gathers and disseminates consumer data must have a privacy statement that users, not corporate lawyers, can comprehend. Although they appear straightforward, privacy policies are frequently so lengthy and loaded with legalese that users simply scroll through them without reading a word.
Users can utilise data privacy “road signs” to guide them.
There is a misperception that Facebook is under fire for exploiting user data to target advertisements, but in reality, this is because previously, the firm hasn’t provided any of this signage to its users. Consumers’ trust in its brand has been harmed by its vast acquisition of user data without providing an explanation of how or why.
Twilio’s privacy signage makes it very clear that the company shares some user information with other businesses in order to enhance the quality of calls for users. Good privacy signage also explains to users with whom and why a company shares data with partners and third parties. Consumers are persuaded to choose products that offer less clear data privacy signage by unambiguous instructions.
Make data privacy part of company culture
Users should be informed of a company’s data privacy practices early and frequently, but maintaining those practices requires internal work. The culture of a company can be improved by leaders encouraging employees to act as responsible data custodians.
One of these processes is recognizing staff members or teams for performing their duties efficiently and effectively. For instance, leaders can call an all-hands meeting and invite a team that achieved its objectives despite restricting data access to discuss how they did it and what they learned.
A business can also use tokenization, which replaces sensitive data with digital “tokens” that would be useless if intercepted or leaked (such as poker chips or arcade tokens). The actual data is transferred to a secure vault that the company is unable to access.
These adjustments promote a culture that relies less on data access and fosters innovation. Finally, executives can be assigned as privacy sponsors who promote user data privacy and hold management accountable for adhering to company privacy policies.
It’s time for all businesses to take a position on data privacy now that Apple and Facebook have thrown down the gauntlet. Consumers will gravitate toward businesses that value and protect their data in the years to come. Those who are open and encourage good internal data privacy practices will attract more dependable and devoted customers, which will strengthen their businesses.
Data: Proceed with Caution
However, Apple hasn’t completely stopped using user data. The key is not to swear off data collection completely, but to carefully consider what data they need if organizations want to follow the lead of privacy-first companies and use their data privacy stance as a market differentiator.
It can be tempting to collect as much data as you can when on the road to becoming a data-driven business, with the intention of figuring out which of it is useful. However, this is a false friend. In addition to wasting resources collecting data they don’t need, businesses risk alienating their users and customers with the volume of data they collect.
The more personal data you possess, the more vulnerable you are to hackers. By gathering excessive amounts of data, you can also be putting yourself at risk for harsh penalties. Laws like the GDPR impose fines on companies that permit the exposure of customer information due to a security breach or data leak.
Although data-driven personalization can be very effective, it can also be very important to choose carefully how much information you gather about your users.
Adopting a “privacy-first” attitude could lead to more customer loyalty and goodwill, which is good for your business in the long run, unless your data operations are giving your users big, tangible benefits.