In our now digitalised world there is evidence that, for some people, value and convenience are overcoming concerns over data usage. But that doesn’t mean that organisations can get away with anything less than the highest standards when it comes to using personal data. Quite the opposite in fact.
People are constantly changing their attitudes and behaviour, not necessarily all at the same rate, or in the same way. It is worth considering how attitudes are changing by generation in order to manage the expectation and demands of each.
The Millennial is one of the most publicised demographics at the moment. And by 2020, Millennials, and their older counterparts (known as Generation X), will form 50% of the working population. This group has already demonstrated a much more relaxed attitude than older age groups toward sharing personal information with brands in a fair value exchange.
Those aged over 55 are less likely to share their data than their younger counterparts (16% stated they would be happy to share). Equally less than one in ten would be willing to share data to create a personal digital identity. This is linked to their overall digital appetite with less than 20% of people aged over 55 who would use a mobile app purposely designed to help to manage their personal finances, compared to more than half of people age 16-24. (Read more about Millennials in our earlier blog)
There is plenty of evidence that convenience is in fact the primary driver for all generations already. A recent survey looking at attitudes toward secure real-time exchange of bank statements, which customers provide consent to share in support of a credit application, shows that 85% of respondents believe banks should offer the service. Furthermore, 75% said they are happy for automatic updates of their data to be used to help avoid any repayment issues.
One thing is certain: today’s consumers are far more aware of the value of their data. They recognise that they ‘own’ their data and accept the responsibilities that come with this ownership. That said, this increased awareness has not meant that more consumers are shying away from sharing their data, nor has it therefore hampered the growth of the data market.
In fact, people seem to be increasingly comfortable with sharing their data, on their own terms. A recent Experian survey found that 69% were happy for brands to use their personal information to send them discounts on products and services that they really want.
Trust from transparency
Transparency is essential. Customers are far more willing to share data with brands they trust and are already loyal to. This means respecting and protecting privacy. Omni-channel marketing and sales is now a reality, and they truly put the consumer at the heart of business. This means bigger data volumes, which, in turn, mean more focus on security.
Consumers need to know that their data is safe, and the more they share, the more important that becomes.
People need to feel that they can have a channel for challenging accuracy with data holders too. One holistic model for this could be ‘ethical business regulation’ as positioned by Professor Chris Hodges – a clear measure and message that reassures consumers that all businesses must meet a certain, agreed ethical standard.
There needs to be more encouragement for businesses to act ethically, but businesses should seek to resolve complaints from data subjects directly in the first place. The ‘consent dashboard’ that Open Banking is poised to bring may help with managing data. In addition the introduction of regulations like GDPR are based around a need to help people with their data.
Most people are more than willing to engage with the data economy, provided it’s worth their while. This has been clearly demonstrated by loyalty card schemes, such as those from supermarkets, where purchasing data is used to provide more targeted, personalised shopping experiences and promotions. Likewise responsive data that is used by some online retailers, personalised the experience offering recommendations and positioning relevant and personalised cross-sale opportunities directly in the eyes of the customer.
What we can take away from this is that there is an opportunity to develop a culture of data exchange fit for the 21st century economy. Organisations, across sectors, need to lead that dialogue, stepping up efforts to raise awareness about the way in which data is created, collected and used for the benefit of all.
What companies should focus on
• Make transparency a core part of your strategy and daily operations.
• Always act in the best interest of the customer, don’t just talk about it.
• Ensure frequent and open communication.
• Question if what you’re doing is delivering value to the customer.
With Open Banking and data sharing becoming more apparent, and consumer trends around everyday tasks like shopping moving online, it creates a multitude of data assets and creates a surge of information not many businesses can, or do, translate into anything tangible for the customer.
Basic areas such as security are essential. Getting this right will make the difference between a repeat purchase, and a customer who’s likely to complain, socialise the complaint and not return – but more importantly be inconvenienced and exposed. Why would a person choose to transact with a business that isn’t trustworthy? Businesses need to ensure they minimise this risk wherever possible. How they do this will change from organisation to organisation. But the business that gets it right will be the one who has one thing at the heart of its strategy. The customer.