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Efforts to preserve data privacy can offer firms an edge over competitors


Consumers are often demanding more responsible conduct from businesses; they are changing their consumption choices to influence business behaviour. In this article we talk about the increased social need for respecting consumer data privacy.


While data can be of significant use to business, it can be against the goodwill of consumers


Many businesses today rely on the use of consumer data to be able to understand the target markets better, improve engagement and direct marketing campaigns more effectively. However, the use of “big data” to target consumers has raised government and consumer concerns about the misuse of personal information and breaching privacy. Given the risks one is prone to when sensitive data is circulated without permission, customers are increasingly anxious on the aspect of compromised security.

Given such risks in the usage of consumer data to a companies’ advantage, the European legislation has imposed privacy controls and regulations such as the General Data Protection Regulation (GDPR) on corporates. South Asian countries like Sri Lanka, however, lack adequate privacy controls yet, leaving the consumer at increased risk of personal data.


As consumers resign to the fact that their private information is being collected by businesses, organizations should do everything in their power to safeguard personal data of customers.


In times where cybercrime is at its peak, protecting customer data and giving prominence to their privacy has turned out to be more important than ever before. Almost any piece of data that the company collects and stores from its customers (something as simple as an email address) can be exploited by a cybercriminal. Cybercrime was up 600% due to COVID-19 with damage relating to cybercrime being projected to hit USD 6 trillion annually by 2021 – PurpleSEC.

Understanding your consumers concerns on privacy can help allay fears of data misappropriation and misuse. It can also help brands build a strong relationship with the customer who would appreciate the high regard they have for consumers.


While costs involved in meeting all privacy requirements can be quite high for some companies, consumer data privacy can be achieved through simple sound privacy strategies like:

  1. Requesting consumer consent before sharing personal information.

  2. Being transparent with the consumer on the purpose of collecting such information and who would be given access to it.

  3. Explicitly stating in short, the disclaimers and terms and conditions of the use of such data by the business. The length of terms and conditions that consumers need to “Accept and Continue” prior to being able to use an app or make a purchase online is a significant deterrent to enable consumers to read such terms.

  4. Use simple language. The legal terms used in most clauses is not easily comprehensible by layman.

  5. Only collect data you truly require. In some cases, the collection of data is merely to keep up with competition, even if the company lacks digital technology to run analytics that would truly make best use of such data. This should be avoided. Continuing to exploit consumer data merely because competitors are doing so can eventually be immensely disadvantageous to a business.

References:

https://www.specialityfoodmagazine.com/news/transparency-sustainable-businesses-food-drink

https://www.fooddive.com/news/report-consumers-want-increased-transparency-from-retailers-and-brands/532723/

https://projectcor.com/blog/transparency-the-key-to-improve-relationships-with-customers/

https://www.forbes.com/sites/forbesbusinesscouncil/2021/05/04/transparency-is-no-longer-an-option-its-a-must/?sh=1553d00375fe

https://www.bsr.org/en/our-insights/report-view/responsibility-and-transparency-in-advertising

https://www.information-age.com/10-ways-businesses-can-protect-customer-data-123459341/

https://purplesec.us/resources/cyber-security-statistics/