Why we must get data privacy right

As consumers over the world gear up for the holiday shopping season, and with Black Friday and Cyber Monday soon upon us here in the US, global consumers will be purchasing online more than ever before. In fact, global e-commerce sales are projected to be more than $140 billion over the holidays, up 15 percent from last year’s record. With all this online commerce, consumers will be knowingly – or unknowingly – sharing their personal information with companies and websites when they make purchases. A common belief is that consumers have lost the ability and will to control how their personal information is used online. But that appears to be changing.

According to the Cisco 2019 Consumer Privacy Survey recently released, a significant group of consumers care so deeply about data privacy that they are already acting to protect their data – even by changing providers when necessary. Cisco's study draws on survey responses from more than 2600 adult respondents in 12 countries worldwide. It explores consumer attitudes and actions regarding their personal data, the products and services they use, their comfort level with potential new business models, and the impact of data privacy regulations. By surveying consumers, Cisco's study also adds an end-user perspective to Cisco research on the corporate impact of changes in the data privacy industry.

What consumers tell us about privacy

Overall, Cisco's findings reveal a new landscape in which privacy has become a critical business imperative and an important driver of consumer behavior. Specifically, Cisco covered four areas of insights in the study:

1. People care about privacy and many have already taken actions to protect it. Cisco identified a group of consumers (32%), referred to as “Privacy Actives”, who say they care about privacy, are willing to act to protect it, and have already acted by switching companies or providers based on their data-sharing practices. The Privacy Active group is sizable and is an attractive demographic for companies because its members skew younger and do more shopping online. Perhaps most importantly, this group sees respect for privacy as core to the customer experience.
2. Privacy regulations and policies provide “guardrails” for innovation and help build trust. Cisco's research looked at several potential new business models where personal data might be used in unexpected ways but could enhance personal safety and security. One example would be sharing personal information from home or a car in exchange for health or safety warnings. Overall, consumers were generally uncomfortable with these models, but those respondents who were aware of privacy regulations (for example, the EU General Data Protection Regulation – or GDPR) were much more comfortable than respondents who were unaware.
3. Consumers value government’s role in regulating the use of data, and they view the GDPR very favorably. Survey respondents want the government to play a role in providing oversight and to make sure companies are complying with the law and their stated policies. Perhaps for this reason, GDPR is perceived very positively around the world (55% favorable vs. 5% unfavorable). In addition, consumers felt that GDPR has given them more control over their data and has enhanced their trust in companies using their data.
4. Many consumers (43%) say they still cannot effectively protect their data today. While there are many reasons for this, by far the biggest reason stated is that it’s too hard to figure out what companies are actually doing with their data.

A new way to understand the value of privacy to companies

Cisco's research also suggests a new framework for measuring the benefits and return on privacy investment beyond regulatory and compliance requirements.  Specifically, the areas of benefit include:

• Attracting and retaining customers who care about privacy and are willing to act
• Improving business agility and innovation
• Reducing sales friction
• Enhancing the overall attractiveness of the company.

As more consumers place a premium on proper protection of their data, companies have a significant opportunity to meet regulatory requirements while they realize business benefits and build trust with their customers. For most organizations, privacy has become a critical business imperative.

By Robert Waitman

Published with permission from blogs.cisco.com.