Digital privacy is now more discussed than ever. Many people around the globe are wary of frauds and scams that appear on the Internet and therefore hesitate before making any important decision such as purchases, or even subscriptions. For CEOs of companies, this makes it more challenging to raise the business from the ground up. People need to feel safe to buy from your business.
7 Data Privacy Trends Every CEO Should Know Right Now
Unless everyone in your target audience is a privacy nihilist i.e. doesn’t care about data collecting or breaches, you need to learn which privacy trends could impact your business. With that in mind, here are 7 things you must know about data privacy to succeed in today’s market.
1. We live in a different era of data privacy
We do, indeed. All around the world, countries, and states are making changes in regulations to protect the consumer. As digital crime grew, so did the need for stricter privacy laws, regulations, and higher penalties.
This trend was prompted by the GDPR coming into force. With it, the European Union set an example of how personal data should be defined, and how people can be protected from misuse and fraud. We still have a long way ahead, but this had a tremendous influence on several other legislative systems.
Just last year in 2020, the California Consumer Privacy Act came into force. This was the first US privacy law similar to the GDPR, creating new obligations and rules for businesses within the state. It prompted the creation of other laws that follow. For example, soon after, Brazil came up with the LGDP in September, a law that is set out to protect the data of over 140 million users.
The California Privacy Rights Act or CPRA set out to replace the older Privacy Act. As a result, many organizations are required to make adjustments in terms of data privacy and processing. If this concerns you, and it does even if you’re not based in California (if you cater to people from the state, it concerns you too), you should read this CPRA guide for more information.
Making the necessary changes as soon as possible can prevent many unnecessary expenses and problems.
2. Smart companies actively invest in privacy technologies
It can be challenging to keep up with all the changes in global data privacy. You cannot be expected to keep track of every new regulation that might concern your business. Customers’ requests grow alongside these changes, which is why businesses started looking for a solution – and they found it in privacy technology.
By 2022, Gartner's data predicts that companies’ spending on privacy tools will increase to over $8 billion on a worldwide level. What does this mean for you?
To keep pace with the changing regulations in the past few years, companies started investing in privacy-enhancing technologies and programs. This eliminated the costs related to penalties that result from unintentional mistakes or lack of knowledge, as well as helped businesses maintain a solid ground with consumers.
Tools like de-identification and homomorphic encryption can assist you in filling data governance requirements. You can use them to automate many compliance processes, review consumer requests, and create advanced data mapping services.
3. Transparency is in high demand
People are more likely to trust a company with established credibility. Right now when people are more wary than ever about whom they trust online, transparency is key to success.
Today, 81% of consumers expect a high standard of transparency from brands they are using. Almost three-fourths of consumers are more likely to pay more for a product that guarantees total transparency.
To be a CEO of a successful company, you need to provide three things to your consumers:
- Transparency in terms of how you use their information
- Control over what information they give you
- Strong privacy policy in place
The need for this grows with every new scandal that appears in the online world. We faced some large-scale breaches in the past few years. People are becoming more concerned about their data privacy. According to Cisco, 50% of consumers are willing to change companies because of poorly crafted data sharing practices or policies.
4. The time to say goodbye to third-party cookies is now
We all know about those tiny bits of codes used to follow people around the sites and the net. These are the cookies. For a long time now, they’ve been recognized as creepy, unfair means of surveillance. Because of people’s rough response to cookies being used by businesses, some search engines already phased them out.
Safari and Firefox started phasing these out some time ago, and Chrome is right behind them. They all announced that they’ll say goodbye to third-party cookies by the end of 2022.
So, new changes are in place, changes that you should be familiar with. Google has introduced a set of solutions for an experience without cookies, Privacy Sandbox. In it, businesses or advertisers can keep doing behavioral targeting. Only now, they call this a Federated Learning of Cohort, which is basically a big machine-learning model.
Google will now help businesses group their users by putting them into cohorts based on interests and demographics. This means that there won't be an AI model that ingests people's individual data. The data will be processed locally, on a device that the consumer uses for browsing. When that model is completed, the data will be passed a lot to larger models that allow for better ad-serving.
This is certainly an improvement in terms of privacy, but there are still some critics. So, prepare for the change, but know that something else might just turn up around the corner soon.
5. Some people started seeing data as currency
Such beliefs haven’t prompted a change yet, but you need to keep on track with this big flow of thoughts. The debate over privacy regulations revolves greatly around this – data economy. At the heart of the data privacy debate lies the question: Should data be a currency?
Some publishers like newspapers already work with ad platforms to show visitors targeted ads. In other words, they pay for the publishers' operations. Others collect data to promote their products and push them to the targeted audience.
Simply put, everyone seems to be earning money by using private data – except for the people who own that data. Some people think that this must change, and soon. For example, in 2018, two authors named Glen Weyl and Jaron Lanier shared their thoughts that users should be paid by companies who wish to use their data.
We are still far from this point, but it's worth learning a bit about. According to proponents of the idea, this way will give people more control over their private data.
6. The Facebook-Apple fight is making things change
When people fight, we say: that’s not our business. But, when giants like Facebook and Apple fight, this changes everything. In an Apple iOS update, apps will ask the users for permission to track them across other apps and the web. This is a huge change and a result of the now long-lasting fight between these two companies.
Such a change is very troublesome for companies like Facebook. It's troublesome for all companies that make most of their money by following users' behaviors and turning the data into personalized ads.
7. You need to seriously focus on third-party risk management
In 2020 and 2021, and probably in the following years too, the focus of CEOs is on third-party risk assessment and management. Changed regulations already deepened the obligations that companies had in terms of data processors, evidence of compliance, and sub-processors.
What does this mean for you?
It means that you need to put extra effort into vetting every third party your company works with. This can save you from many issues and potential risks. Since practically all organizations are linked with third-party services at this point, this is necessary for them to continue running things smoothly and without legal repercussions.
Let’s back this with two amazing statistics:
- DarkReading reports that data breaches are around $700,000 more expensive when a third party is in the picture
- A SoHa report shows that over 63% of all breaches are attributed to third party vendors
There's nothing bad in being reliant on supply chains, staffing companies, manufacturers, support services, and other third parties. As long as you have effective risk management for third parties, this is a solid way to thrive in the market you've picked.
Final thoughts
Consumers' privacy is causing CEOs more headaches than ever. People are well aware of the rising crime in the online world and therefore need constant reassurance that the data they provide will be kept safe. If you want to keep people interested in what you're offering, you need them to trust your company. This is best done by taking action, but to do that, you need to know about the latest changes in privacy data and the digital world in general.
Guest post courtesy of Daniel Quintero