Data Transparency: A Top 2020 Priority

Data Privacy Continues as a Key 2020 Trend for Marketers

We just rang in a new decade, but data privacy is a twenty-teen trend that will certainly continue to shape how companies go to market. My team is tracking legislation that was introduced and/ or enacted in more than 25 states in the United States, the slower-moving efforts occurring at the federal level, and GDPR-like legislation across the globe.

Aside from new legal obligations around data privacy, business leaders should be paying attention to growing consumer concerns. Consider these findings from a global study published in early 2019 by Ipsos and the World Economic Forum:

  • Only one in three adults globally have a good idea of how much personal data companies hold about them (35%) or what they do with it (32%)
  • On average, only 36% trust various types of organizations with how they handle personal data

Transparency Is Critical to Earning Consumer Trust

How can you help your company close these gaps? No matter what industry you’re in, I strongly believe that the most important step is to bring much more transparency to your data practices.

In the Ipsos-World Economic Forum study, the top factor that consumers said would make them more comfortable sharing personal information with a company was that company being clear about how it will use the data (cited by 67% of respondents). This finding is very similar to Otonomo’s findings from our 2018 study of new car buyers and car owners, fielded by Edison Research: When deciding whether to allow an app to collect data, the most important factors that consumers consider are how trustworthy they perceive the company to be (68% of drivers indicated this was “very important”) and whether they are told exactly what the data is being used for and who has access to it (63% of drivers indicated this was “very important.”)

When it comes to increasing transparency about your data practices, you have a number of tools at your disposal. Here are my suggestions about how to deploy those tools to best effect.

Start with Plain Language

Your legal department may have a big stake in communicating your data practices, but businesses need to translate legal requirements into regular language that consumers can understand. It will help your case knowing that concrete, definitive language is part of the European Data Protection Board’s transparency guidelines—and thus a data privacy best practice.

In addition to using consumer-friendly language in formal privacy policies, it’s helpful to add a Privacy Center to your website with a short policy summary, a Frequently Asked Questions page, and clear information about how to opt out of data collection as applicable to your business.

Take a Multi-Channel Approach

Data privacy practices involve a lot of consumer education, and multi-modal education is more effective than education delivered through a single format. Find ways to connect with your consumers through multiple channels: through your website, through social media, and even through a privacy-focused call center. Incorporate visual elements such as videos to reinforce written materials.

Educate on the Benefits of Data Sharing

For the most part, businesses collect data to give their customers a better experience. Data may also generate indirect benefits. In the automotive industry, aggregate connected car data is being used to improve mapping applications, reduce congestion, and cut down on pollution. It’s important to be explicit about the rewards that come from data sharing.

Extend Transparency to Internal Stakeholders

To be effective, data privacy practices need to be deeply embedded into your company’s culture. That means extending transparency to your employees as well as customers. Furthermore, the latest Glassdoor research indicates that Culture & Values are workplace factors that matter most to your prospective employees. How you communicate your data privacy practices says a lot about who you are as a company.

Your Action Item: Apply Transparency Best Practices to Your Company and Industry

Companies’ data strategies are as unique as the businesses and industries they support. But if there’s one thing that everyone should remember, it’s this: Privacy is a never-ending process, and there is no panacea of business practices or software products that instantly gets it done. And likewise, transparency is a never-ending process. Your action item is to apply it to every consumer touchpoint.

Want to dig deeper? Read our Car Data Privacy Playbook.

Architected for security and privacy by design, Otonomo’s platform complies with even the most stringent data privacy regulations including GDPR and CCPA, ensuring all parties are protected and companies remain compliant across multiple geographies.

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