Todays connected consumers expect services to be seamless, unobtrusive, and delivered on their own and exacting terms. In exchange for an enticing combination of convenience, value for money, varied payment methods and an engaging experience they are happy to part with personal data.
This can be particularly fruitful for the retail industry, where businesses thrive on delivering a personalised service. Digital data enables retailers to optimise every aspect of the customer experience, from visual merchandising campaigns to crowd control.
At Osborne Clarke, were excited by the commercial opportunities offered in this brave new world of data-led connectivity. Its both impossible and undesirable to ignore the alacrity of change were experiencing, and so we commissioned a report to help businesses from all sectors harness their digital power.
However, before businesses can truly capitalise on these novel innovations, customers need reassurances about how their data is being handled.
For example, our findings revealed that only 11 per cent of UK consumers don’t mind how their shopping behaviours are tracked. When it comes to actually making a purchase, 26.4 per cent of UK consumers said they were comfortable sharing their personal data.
Ultra-personal information
With more information than ever at our fingertips, humanitys thirst for knowledge has perhaps never been greater which could explain the rapid rise of wearable health technologies.
The likes of smartwatches and fitness trackers are taking widespread connectivity to brand new levels, gifting companies with an unprecedented amount of information concerning their customers. However, this also presents a huge potential risk due to the sensitivity of the data collected.
Among UK consumers, fitness trackers are the most popular pieces of wearable technology: 12.3 per cent use a fitness tracker, five per cent a health tracker. However, such prevalence inevitably provokes questions around how data from these devices is collected, stored and distributed.
Alarmingly, only 55 per cent of customers who own a piece of wearable technology are aware of how their data will be used and shared. It is important that companies in this sector seek to build trust by ensuring users are made aware of how their data is being used, inviting their consent through rigorous and ethical data collection processes.
Read more on the use of data:
- Government should be using data to help solve digital skills gap
- Prison, fines and reputation damage cost of bad test data management on finance institutions
- SMEs should do more to embrace big data and learn from the big players
Internet of hackable things
In fact, one of the burgeoning issues facing businesses that build Internet of Things (IoT) products is data privacy and usage. With the potential for everything from dustbins to cars becoming connected, many traditional companies will all of a sudden find themselves as custodians of personal data.
This has the potential to put these organisations in an uncomfortable position, having to rewrite processes and adhere to emerging regulation that might once have not been on their radar.
Again, this is where the twin importance of informed consent and data security comes into play. Indeed, our findings revealed that, for 26.6 per cent of UK consumers, understanding exactly how their data was to be used in advance is fundamental. With more than 4.6bn connected “things” in use worldwide, this is only going to grow in prominence as an issue.
Continue reading on the next page for the six-point problem prevention plan for data protection.
Prevention plan
Currently, 500,000 is the greatest pecuniary penalty for major breaches of the UK’s data protection law. However, under impending European legislation, UK businesses will face far heftier fines.
Once the General Data Protection Regulation comes into force in 2018, companies across Europe could potentially be hit with fines of up to 20m or four per cent of global annual turnover whichever is the greater. To avoid the devastating knock-on effects of a data breach, all businesses need to assess the way they collect, process, and use customer data.
Consequently, business owners everywhere would be wise to follow this six-point plan:
(1) Assess all data-processing activities: Consider what data is being collected and how it is being used, taking into account whether that use is fair and can be justified. Often, companies keep excessive customer data just in case it’s required someday . This may seem prudent, but data thats not critical to business often receives inferior protection because it gets forgotten, falling into the hands of cyber criminals.
(2) Align privacy policies and statements: Do they accurately reflect reality and are they clear to consumers
(3) Look at the data-capture processes objectively: When and how is information about privacy given to customers How much control do they have over how their data is used How easy is it for consumers to find simple and straightforward information about data-processing activities
(4) Review supply chain contracts: Avoid compliance headaches by making it mandatory for suppliers to comply with good data handling practices.
(5) Train staff to treat personal data properly: Make sure everyone takes responsibility, ensuring they have all requisite information to hand.
(6) Incorporate a tried-and-tested plan to deal with data security breaches: Put measures in place to deal with any security issues quickly and efficiently.
Ultimately, consumers in our digital age understand that there is a trade-off for living a lifestyle thats convenient and connected; they understand that the terms of that trade-off is the exchange of personal data.
This certainly doesnt mean, however, that consumers arent cautious and inquisitive about how and where they share that data and what they get in return.
For all parties to benefit and to build trust, it pays to be diligent and open when handling this delicate commodity.
It is vital that companies who handle data build a reputation with their users, something achieved by investing wholly in protection and by providing transparency around information usage. Only in this way, can organisations truly free the power of data.
With reputation in mind, here are the top five reasons an employee would be ashamed to work for your business.
Jon Fell is a partner at law firm Osborne Clarke
