Striking a Balance: Leveraging Consumer Data Opportunities and Upholding the Privacy Imperative

With consumers’ rising adoption of digital technology, enterprises are presented with the chance to enhance their consumer engagement. However, along with this opportunity comes the responsibility to ensure the safety and security of consumer data. The data generated, which may include personally identifiable information, can hold immense value for companies. This valuable information enables organisations to gain insights into consumer pain points, meet needs, and know preferences. Such insights aid in developing new products, services, personalised advertising and marketing strategies, ultimately enhancing the overall consumer experience.

However, consumers are becoming increasingly cautious and deliberate when sharing their personal data and choosing the recipients of such information. They are now more hesitant to disclose their data to organisations than in the past. This lack of trust is understandable, considering the numerous high-profile breaches of consumer data recently. The escalating number of breaches and the growing demand from consumers for privacy and control over their data have prompted governments to introduce new regulations, including the General Data Protection Regulation (GDPR) in Europe, the California Consumer Privacy Act (CCPA) in the United States, and others, with the Digital Personal Data Protection Bill, anticipated to be introduced in our country soon.

Given the high stakes involved and the increasing awareness of these issues, how companies handle consumer data and privacy can become a distinguishing factor and potential source of competitive advantage. This blog presents best practices for customer-facing approaches that empower companies to position themselves favourably and gain a competitive edge. 

Compliance Investments

Companies are making substantial investments to ensure compliance with data regulations. Fortune Global 500 companies are estimated to have spent $7.8 billion by 2018 in preparation for GDPR. To meet regulatory requirements, companies have appointed data protection officers, a newly mandated role under GDPR for organisations dealing with significant volumes of personal data. Despite these efforts, achieving full compliance remains a challenge, and many companies are actively working on finding solutions.

The complex and diverse nature of regulations, especially for international companies, presents a central challenge. Requirements can vary significantly across jurisdictions and markets. To address this regulatory diversity and proactively anticipate future regulations, companies are adopting systematic approaches to compliance. This includes establishing dedicated regulatory roles and responsibilities within their organisations and implementing future-proof solutions. For example, Microsoft is applying the stringent CCPA requirements not just in California but to all US citizens, setting a higher standard than what is currently mandated in other States. This trend will likely become more prevalent worldwide as companies align with the most stringent legal requirements as their baseline.

Another significant aspect of privacy regulation revolves around data deletion and portability. Regulations grant consumers the right to request the deletion of their data or the provision of their personal data to individual consumers or other services. However, these tasks pose technical challenges for many companies. Corporate data sets are often fragmented across diverse IT infrastructures, making retrieving all information about individual consumers arduous. Additionally, some data may be located outside the enterprise within affiliate or third-party networks, further complicating the identification and transfer or deletion of data from all sources.

Proactive steps for companies

Several effective actions have emerged for companies that seek to address enhanced consumer privacy and data protection requirements. These are:

1. Data mapping – Leading organisations have developed data maps or registries to classify the various data they gather from their customers. Companies must clearly understand the specific data they need to cater to their customers’ needs. A substantial portion of collected data is often unused for analytical purposes and becomes unnecessary in the future. Companies can effectively minimise risks by selectively collecting data that is likely to be required. Additionally, it is essential to establish or update policies for data storage and security, taking into account the distinct categories of data that may necessitate different retention and storage protocols. 

2. Operations – Organisations also implement identity and access management protocols that align with individuals’ roles, assigning varying security access levels based on different data categories. Plenty of reports have linked data breaches to insider threats. To mitigate this risk, it is important to restrict data access to authorised personnel only, ensuring that individuals do not have unrestricted access to all available data. While robust identity and access management practices can be effective, it is important to note that certain breaches may still occur through individuals with approved access. Therefore, supplementing these practices with additional activity monitoring can provide an added layer of security.

3. Infrastructure – Organisations are developing infrastructure that can easily handle the growing amounts of collected data, along with technological advancements. A recommended approach is to store data in a few select systems based on data type or classification. By minimising the number of systems used, the risk of data breaches is significantly reduced and contained in moments of emergency.

4. Consumer-facing best practices  – Leading companies are incorporating the concept of “privacy by design” into consumer-focused applications, integrating features like automatic timed logouts and enforcing strong password requirements. This ensures that security and privacy are inherent features for users while also maintaining a seamless user experience. Effective communication is key for organisations, as customers should be informed about the purpose and timing of data collection. Many companies now emphasise consumer privacy as part of their value proposition and carefully craft privacy policies and cookie notices to align with their overall brand message.

5. Infrastructure Preempting threats  – Training employees on data protection and privacy best practices plays a crucial role in preempting the risk of data breaches for companies. Employees become aware of the importance of safeguarding sensitive information and gain a deep understanding of potential vulnerabilities and threats. They learn how to handle data securely, recognise phishing attempts, use strong passwords, and follow proper data storage and sharing protocols. Undoubtedly well-trained employees act as a strong line of defence against cyber threats, ensuring compliance with data protection regulations and minimising the risk of data breaches.

The last word
In conclusion, as the digital landscape evolves, the right balance between leveraging consumer data for business growth and safeguarding privacy is paramount. Compliance with data regulations is crucial, and organisations must invest in infrastructure, develop systematic approaches to compliance, and address the challenges.

e business landscape, organisations that proactively prioritise privacy will be well-positioned to thrive and build enduring relationships with their customers.

DISCLAIMER – No information contained in this website may be reproduced, transmitted, or copied (other than for the purposes of fair dealing, as defined in the Copyright Act, 1957) without the express written permission of Rainmaker Online Training Solutions Pvt. Ltd.