Are we about to enter an age of hyper-awareness of data’s worth? If so, what does that mean for the businesses who use their customers’ data to build better services?
As the Cambridge Analytica scandal continues to reverberate around the world, prompting questions about data handling, the effects are just starting to be felt.
But beyond the immediate fallout of the scandal, headlines about Facebook’s use of user data and how it and third parties manage that data raise questions for other businesses around how they use customer data.
“My hope is that this actually causes people to start to question the arrangement being entered into when they hand over data to a business,” Digital Rights Watch chair, Tim Singleton Norton, told The Pulse.
“If you’re giving that data to someone, do you trust them to use the data in the ways you’ve allowed them to? Do they have protections to make sure third parties and fourth parties don’t use it in nefarious ways?”
A lot of businesses use data in transparent and productive ways – such as using customer data to improve their services or websites.
Think Netflix and how it serves you content based on your browsing habits and demographic information.
A retailer, for instance, may be able to pull demographic information about their users to make the online shopping experience better.
It’s the way many businesses operate, but also the way Cambridge Analytica is alleged to have attempted to influence the US election.
And it’s relatively basic-level stuff.
As the data capabilities of businesses both big and small continue to mature, the opportunities to profit from that data by creating a better user experience will only grow.
But will this ability be stymied if users start to become hyper-aware of how their data is being used and pull back from offering that data?
According to the MYOB Radar Report on privacy in the age of big data, consumers are relatively happy to trade off personal information for a discount, reward, or social inclusion.
We’re also seemingly happy to allow listening devices into our home in exchange for quicker information about the weather and play music by using voice control.
We, by and large, are incredibly trusting when it comes to corporations having access to data about us.
A report by the PEW Research Centre found that people are happy to accept surprising incursions into their privacy in return for relatively minor benefits:
But this was all pre-Cambridge Analytica – and Norton thinks the scandal could contribute to increasing awareness of how companies are handling data.
“I think Cambridge Analytica is going to the ‘nth degree’ of something people are increasingly concerned about…showing people what can happen,” he said.
“I think it’s the start – it’s one of those unfortunate instances where something horrible needs to happen to spark the debate to make it better.
As headlines continue to swirl, we could begin to see a new age of data awareness – and businesses of all sizes may be caught in the crossfire.
So, how do you survive in that environment if you’re a business that uses a lot of user data to provide a better experience?
Norton said businesses need to start being more proactive in the conversations they have with their customers about data use.
“It will be awkward, but it’s part of what needs to happen,” he said.
“Have an honest conversation with people about how you’re engaging with them, and show them the trust and respect they deserve by demonstrating what you’re using their data for. If you have a better-informed customer base…then I think that returns a more loyal customer.”
He said in the absence of better regulation around data usage, it was up to businesses to be proactive in showing how user data is being used.
There’s also the possibility that data usage will become an ethical consideration for consumers, in the same way fair trade or animal cruelty is a growing consideration now.
“I think it should become an ethical consideration, but I don’t think anyone’s thinking that way just yet,” said Norton.
You may also need to have an awkward conversation internally too.
Norton said businesses could get into the habit of buying into the Big Data hype and start collecting all the information they can about their users – without considering whether they need it in the first place.
“If you’re a business and you tell someone ‘we need you to log in using your Facebook profile because we want to know everything about you. We want to know what you like, what you don’t like, and how you engage with content and what your political persuasion is’ – people will baulk at that.
“They’ll ask ‘hang on, why do you need to know that? That seems to be outside of the remit of the service you provide me’.
“It’s up to businesses to think about the level at which they need to gather data, and then stop there.”
Once your customer understands what data you need and how you’ll use it to improve the service they receive, it’s time to spell that out and prove that you can keep that data safe.
Some businesses, such as accountancy firms, hold sensitive information about their clients.
This is information which, if used maliciously, could be used to steal the identity of the client and commit fraud.
This possibility, however remote, can make your clients wary of handing over information to you – and that affects the working relationship you have with your client.
So, how do you assure clients that you have no intent to provide their details to any third parties without their express consent?
Make sure your business’ data policy is robust enough to provide peace of mind, but simple enough to actually understand.
Make this data policy available to your customers, beyond the standard terms and conditions put somewhere in the labyrinth of your website.
Norton pointed to Mozilla as a great example of how a company could offer all the terms and conditions you need for them to hold up in court, but still offer users a no-nonsense guide to how data is being used.
“First up you’re told that this is what we stand for, and this is how we’ll use and protect your data. If you want to go deeper into it, you can, but it’s the opposite of some terms and conditions where there are 6000 words and you’re just asked to scroll to the bottom,” said Singleton.
“Nobody’s going to read that.
“There’s a responsibility for business owners to be up front and communicate in a way that people can understand.”
You may worry that spelling out your data policy may end up triggering uncomfortable questions from your customers, but in the age of hyper-awareness transparency is key.
After all, if you have an up-front and easy-to-understand data policy and your competitors don’t, your client may end up asking the same questions of them.
If your business holds a lot of user data, whether that’s through invoicing or registrations, it’s important to demonstrate that you’re committed to keeping that data safe.
In addition to installing anti-piracy software, one of the more effective ways you can defeat prying eyes is to have two-factor authentication (2FA) enabled for access to your system.
MYOB, for example, is 2FA enabled.
You enter your user name and password as normal, but then you’re prompted to enter a code – which has been sent to your phone.
It’s a simple way of dramatically reducing the likelihood of prying eyes gaining access to your customers’ data.
If you can demonstrate that you have a formal policy dictating the use of your clients’ data and are open and honest about how you’re using data – and you can prove your security chops – you’ll be well-placed to survive in the age of hyper data-awareness.