If you are a business using customer data, stay alert

NEW YORK, USA: A new report from Accenture warns that businesses’ use of personal data from consumers is at risk. The report, “Guarding and Growing Personal Data Value,” acknowledges the benefits of using personal data to support innovation in customer service, product development and market development. However, it also identifies the growing challenges that businesses face when using personal data, as a result of changing sentiments among stakeholders such as customers, regulatory bodies and watchdogs.

“Customer data is a digital ‘crown jewel’ for any business but an organization’s ability to collect, analyze and monetize that asset in the future is under threat due to shifting perceptions, preferences, regulations and attacks,” said Ryan LaSalle, managing director, Accenture Security. “Above all, stewardship and effective safeguarding of personal data is paramount to establishing digital trust. The implications of failing to do so extend into a business’s operating model – meaning businesses must be organized and have the capabilities to protect the data that is entrusted to them.”

Ninety per cent of respondents said digital stewardship is the most important principle in terms of improving their business reputation and being responsible managers of personal data, and 74 per cent said that their businesses are taking action on this principle.

The report identifies several trends affecting the outlook of businesses using personal data including. It points at a crisis of trust in data security wherein customers won’t do business with companies they don’t trust with their data – and customers’ trust in data security is lacking. It also brings out that customers are acting on their privacy concerns and customer actions to protect their data could compromise the amount and quality of personal data that businesses can use. Customers are demanding a data dividend. Nearly 60 per cent of respondents from products and manufacturing companies reported their customers are actively monetizing their own data – for instance, by selling it to data intermediaries.

What's really interesting is that new technologies and startups are helping people go “off grid” as growth in new privacy-enhancing technologies could impact the quality of customer data available to businesses.

Regulation is also changing the rules of data collection, as governments are increasing their regulatory response to concerns over data privacy. Watchdogs are increasing the scrutiny of business data practices. Groups like Fair Data (U.K.) and Electronic Frontier Foundation (U.S.) are scrutinizing the way businesses manage personal data.

“Rather than fight these trends, businesses should pursue proactive strategies that will help them adapt to the changes ahead,” said Matthew Robinson, managing director, Accenture Institute for High Performance. “This includes investing in the right talent and technologies to bolster their security capabilities and provide greater data protection, defining an operational model centered on risk management goals to better predict, detect, respond and recover from security threats, and taking action on the principles we’ve identified that can promote greater digital trust.”