Early winners in the race to turn Big Data into better business are setting a powerful precedent. Still, for every organization reaping the rewards of Big Data wins, dozens are still struggling. Chief among their many challenges: privacy concerns and avoiding the misuse and/or abuse of personal data.
Every nanosecond, new information about all of us is being collected and disseminated. Imagine a retailer capturing in-store GPS and video data in an attempt to drive applicable offers. If I happen to be in the medicine aisle seeking out a cold remedy and suddenly receive an SMS for a Tylenol discount, I’d be a bit suspicious – and I just might leave my cart where I was shopping and bolt for the exit door.
Therein exists one of the rubs with Big Data and the digital breadcrumbs that we all leave when snapping a selfie, ordering delivery pizza online or sending a text. We’re continually exposing ourselves to businesses constructing and adjusting digital profiles of who we are – which, along with other factors, generates all kinds of actions, from e-offers to how we’re treated at a bank, restaurant or even (possibly) the doctor’s office.
At our recent FICO World 2014 conference, FICO’s Vance Gudmundsen and CoreLogic's Rebecca Kuehn covered the issue of privacy and regulation during their session: “Big Data and Global Privacy: With Innovation Comes Increased Regulatory Scrutiny.” (If you were a FICO World attendee, you can download the Wednesday session.) During the session, Vance and Rebecca examined developments around data privacy in various regions of the world, while tackling questions such as whether the misuse of Big Data could cause discrimination and further widen gaps between different income, racial and gender groups.
Universal, ongoing debates about privacy are consistently driving the discussion, creation and deployment of laws designed to protect consumer privacy rights. Across the globe, regulators have mandated organizations provide greater transparency around data sharing and use. It doesn’t take long, however, for individuals and businesses to find new ways to circumvent these regulations.
In addition, the role of data brokers – who (in the US alone) collect and store billions of data elements covering nearly every consumer – is critical to any debate about Big Data and privacy, particularly since they use both online and offline data to make potentially sensitive inferences about consumers.
Even with data privacy top-of-mind, many consumers get nervous about over-regulation by governments. And consider that Big Data advances are churning out startling, potentially even life-saving improvements. Indeed, it can be tough to choose sides between personal boundaries and, say, a device analyzing a diabetic’s blood sugar. It’s a daunting task for regulators to devise rules that discourage misuse and abuse without also curtailing benefits to both businesses and consumers.
At the end of the day, privacy needs to be a key consideration for any business. Big Data abuses can mushroom into lost profits, brand damage and costly lawsuits.
Organizations that provide better information to consumers and follow the spirit of regulatory guidance are usually better positioned to stay out of regulatory hot water and gain the trust of potential and existing customers. By providing up-front communication about how customer data may be used, as well as understanding the value and potential use of data being pulled in from external sources, businesses can avoid the misfires so frequently encountered when the “need for Big Data speed” turns into bad decisions, or worse.
Wearing the consumer’s shoes to improve the customer experience can impact both a company’s ties with consumers and its standing with regulators – even beyond data privacy. This is the central theme of our Insights white paper, "Satisfying Customers and Regulators: Five Imperatives." In it, we share customer-centric imperatives – from the consumer’s point of view – for delivering a better customer experience, based on our work with banking clients. For a sneak peek of what's in the paper, check out our quick-flip ebook below: