Data Ethics as a competitive advantage
Why businesses should start implementing data ethics as part of their core values now
Trust into the data economy is at an all-time low
Albeit the GDPR was implemented to protect and enforce data privacy rights, in 2020 consumers’ trust into the data economy is still at an all-time low. And it doesn’t really surprise as data scandals such as Cambridge Analytica and the Brexit campaign were a wake-up call all around the world on just how powerfully companies can use your own data to manipulate you.
In the past year, we have seen first cases of companies being penalised for severe data breaches. We witnessed international institutions such as the Marriott and British Airways making the headlines with fines of £99M and £183M respectively. In the first 10 months after the GDPR took effect, over 200,000 data breach cases were reported to the UKs watchdog, the ICO (Information Commissioner’s Office) and they say this was only a warm up phase.
So, the pressure for companies to deal properly with our data is clearly growing, but does that make consumers feel more assured? The answer is probably no. Even with more data breach cases being fined, it leaves people with the question which company actually uses their data ethically.
According to the GB Consumer Privacy Index, a whooping 43% of people in the UK think there is no point in reading privacy agreements in the first place, because companies still “do what they want anyway”.
Consumers are willing to share their data for services
One could argue that if consumers don’t trust how a company uses their data, why engage with the company in the first place? But it’s not that easy. In today’s world where everything and anything is connected and talks to each other, it’s almost impossible to navigate through day-to-day life without engaging at some point with a company that has a doubtful data privacy agenda.
Further, there is a misconception that consumers don’t want to share their data. They’re happy to do so in exchange for convenience, but 86% of UK consumers state, they want transparency (Foresight Factory).
At the moment, we see very little of that. For most companies, complying with data protection regulations comes as a burden and an expensive overhead.
Make ethical data management your competitive edge
Rather than seeing the implementation of privacy regulations around the world as the ultimate enemy of the data economy, businesses can take it as an opportunity to evaluate their position on how they want to be perceived by their customers in regards to ethical data management.
Similar to what we have experienced with the growing awareness on Sustainability issues and expectations for Corporate Social Responsibility agendas, Data Ethics is becoming the new must-have ingredient for the corporate identity mix. We have experienced the positive effects it can have with the likes of Unilever and Nike. They implemented Sustainability commitments at the heart of their business early on and benefited from it massively both from a business growth and a reputation perspective. It wasn’t about doing it perfect from the start, but to commit to continuously improve the status quo powered by the firm belief that what helps the environment also helps the business. This gave a clear message to consumers who could identify themselves with that effort.
With the rising awareness around data privacy and their rights, it is almost inevitable that consumers will start to turn more and more to businesses that give a clear message on their data privacy policies. Businesses who successfully implement data ethics as a core value, will ultimately gain a competitive advantage and get consumers to choose them over others.