With both consumers and regulators alike pressuring companies to prove they are powering their data use responsibly, a privacy airlock is now preventing data from flowing efficiently through their commercial pipes.
Addressing the complexities of data-driven transformation—harnessing the right tech, tools and people who can extrapolate valuable insights—requires investment. The fear of stepping out of line with regulators, or tarnishing brand value, is also causing repercussions for companies - some of which are obvious, while others are more pernicious. The new wave of analysis paralysis enveloping organizations in our increasingly privacy-centric world is leading to extensive data waste, stifling growth in an economy where the ability to leverage advanced analytics will help differentiate businesses that struggle to survive from those that thrive in Industry 4.0.
From ‘Too Liberal’ to ‘Too Conservative’
Data waste is not new. Initially, the volumes of data companies were accumulating were underutilized, as data was an asset requiring new knowledge and new tools. But as organizations began to understand how data could improve efficiency and consumer experience, we entered an era of data exploitation – one that gave rise to data misuse. This is when consumers became more aware of their digital selves, ‘data for gain’ became a bone of societal contention, and regulatory interventions increased.
While effectively introducing discipline to data handlers, enhanced privacy regulation and enforcement has also had negative consequences, spurring many organizations to over-rotate towards treating their data as a potential liability rather than an asset for growth. Ironically, the data advancements that propelled businesses forward now hold them back; only this time, it is the fear of how to mitigate a tangible risk—rather than ignorance as to how to exploit an intangible asset— leading to mass data waste.
Rules Alone Will Not Work
Data analytics is at an inflection point and companies are at a crossroads as they assess several competing factors: commercial value, consumer trust, regulatory compliance and business strategy. The seeming irreconcilability of these factors leads to paralysis, with no decisions made due to fear of a misstep. To break this logjam and drive data-based innovation forward, a systematic rethink is required regarding data privacy. The conversation can no longer be focused solely on regulations. Instead, we need to be honest and embrace that rules alone won’t help businesses overcome the obstacles that stand in their immediate way.
To break free from the data waste causing analysis paralysis, businesses need to learn from the most sophisticated companies when it comes to data analytics. These companies are embracing privacy-enhancing technologies (PETs) to address their two-pronged problem: how to acquire value from their data while addressing privacy concerns. This approach also requires governments to support positive positioning and drive marketplace incentives that guide a conversation around responsible data practices fostering innovation, not limiting it.
Encouraging Responsible Innovation with PETs
Rather than solely focusing on privacy regulations, we can encourage innovation using PETs. Shifting the narrative to one of empowerment will trigger a change that offers organizations a way out of the privacy prison in which they find themselves. This offers a practical approach to unlocking data and supports a solution that will enable us to both overcome the trust crisis and fuel the trust economy.
By embracing privacy-enhancing technologies that can measure and mitigate privacy risk, businesses can conduct safer, more responsible analytics on their data. Also, since PETs are designed to unlock value and protect privacy, they offer businesses not just a safety blanket but an opportunity. As PETs become more sophisticated and attuned to different use cases, they enable companies to understand ROI on early adoption of a privacy-centric business strategy.
Permissionless Innovation Can Still Exist in a Privacy-Focused World
The modern tech economy was powered by the principle of permissionless innovation, where innovation thrives in a lawless space – cyberspace – without regulatory constraints. But the idea that data-fuelled innovation and data responsibility are mutually exclusive is a canard. PETs continue to demonstrate that lawful innovation is not oxymoronic. And the power imbalance that once favored corporations is now tilting towards the consumers, meaning the “move fast and break things” era is over – especially if the ‘thing’ being broken is consumer trust.
Companies seeking long-term success need to evolve with the times and embrace a privacy mindset. By placing people at the heart of strategy and harnessing technology that protects their privacy, businesses can continue to innovate without compromising consumer trust. Harnessing the power of PETs will help companies to relieve the regulatory and consumer pressures restricting data flow, while ensuring the full potential of their data can be leveraged in a responsible way to lead business strategy moving forward.