As the volumes of data captured from smartphones, laptops, networked sensors and devices are exploding, McKinsey estimates that data collected globally will grow from some 2,700 exabytes in 2012, to 40,000 exabytes by 2020. These exabytes of data – dubbed the ‘new oil’ – offer tremendous opportunities by opening the doors to behavioural and anticipatory analytics, contextual marketing, sentiment analysis, .. .
But there are challenges and risks involved with big data too. Challenges are the adoption of next-generation telecommunications infrastructure, a large enough ‘data talent pool’, and the ability to keep this growing amount of data safe from unauthorised access.
As people are becoming increasingly suspicious of how information about them is used and secured, one of those risks regarding the use of big – and often personal – data is losing the trust of your customer base.
Six Actions To Ensure Customer Trust
In their Global Information Technology Report 2014 (GITR), the World Economic Forums suggests six actions companies should take to ensure trust:
- Asses your regulatory and operational starting point to identify privacy risks & opportunities.
- Have a privacy-by-design mentality, which will avoid unnecessary cost while ensuring compliance.
- Make data protection part of the company culture.
- Cooperate with regulatory authorities.
- Develop industry-specific norms and privacy standards.
- Empower customers.
” Key for gaining customer trust will, however, be the empowerment of customers by clearly communicating their privacy policies to them, giving them options for their privacy settings, and requesting consent declarations. Companies need to ensure that their customers understand what choice means in terms of service performance and make sure their services are providing more value to the customer than the loss of privacy is worth.”
The Global Information Technology Report 2014,
World Economic Forum
Data Regulation Around The World
As data are increasingly used and stored across borders and in ‘the cloud’, the uncertainty about data regulation and jurisdiction creates problems and risks for companies as well. There’s a huge need to establish common international norms, and clarity around applicable legislation.
The GITR report identifies three main archetypes of the level of regulation imposed around the world:
- Light touch/self regulation – Self-regulation is the approach of the US. There’s no general data protection law, but different sectors are regulated by specific laws and states may stipulate their own data and privacy regulations.
- Minimum standard setting – A self-regulatory framework setting out principles for a common, minimal level of data protection across member economies has been developed by the Asia-Pacific Economic Cooperation.
- Strict ex-ante requirements – Data policies as they apply in Europe. Regulations define what is regarded as personal data, and how such data can and cannot be used, but also set organisational and technological requirements.
Image: The Global Information Technology Report 2014, World Economic Forum
It’s worth pointing out that in its recent proposal on the new EU data protection regulation, the European Union extends the applicability of its regulation to companies outside the European Union that are handling data relating to European Union-based individuals.
And whilst one of the most interesting essays in the GITR ‘Big Data’ report is titled ‘The Role of Regulation in Unlocking the Value of Big Data’, it clearly shows that corporations, especially those with an international customer base, should go beyond mere regulatory compliance.
Smart companies will proactively focus on creating a reputation as trustworthy and reliable, in terms of both secure operations and fairly using customer data for commercial practices.
Access the full ‘Global Information Technology Report 2014’ here. Must-read essays in the report are Rebalancing Socioeconomic Asymmetry in a Data-Driven Economy, Building Trust: The Role of Regulation in Unlocking the Value of Big Data and Making Big Data Something More than the “Next Big Thing”.