Striking a Balance Between Data Privacy and Transparency

Here are some ways organizations can balance data privacy and transparency.

From wearables to social media, data about our lives is being collected every day. And yet, most people are unaware of the extent in which their information is being collected. According to an article from the Harvard Business Review, only 25% of people knew their data footprints included location information, and 14% understand they were sharing their web-surfing history.

With data collection and usage increasing and becoming more normalized, in their 2015 report, Pricewaterhouse Coopers (PwC) says:

“When it comes to data about individuals, companies today have a dual responsibility: to use that data to create more value for the company and its customers, and to do so in the most privacy-centric, ethical, fair, and transparent way possible.”

Here are some ways organizations can balance data transparency and personal privacy:

Provide Information as Clearly as Possible

A lack of transparency on how data affects individuals is an impediment to privacy and data safety, according to PwC. People usually get a complex, convoluted privacy policy, which they don’t understand or bother to read. Providing information on data collection and usage up front and in clear terms can help organizations become more transparent and users gain more control over their data.

Disney’s MagicBand bracelet data collection and profiling is a good example. Wearers hold their MagicBands up to sensors at Disney facilities to access parks, check in at reserved attractions and restaurants, unlock hotel doors, and charge purchases. Consumers know what they are getting into because Disney provides clear, detailed policies in the registration process and on their website, including how the RF Devices in the bands work and a link to a more detailed privacy policy. Users also benefit from the convenience and sense of exclusive access from having a MagicBand.

Provide Value to the Customer

Similar to the MagicBand example above, it’s important for organizations to provide an advantage to consumers in exchange for their data collected when possible. Customers place more value on their data as it becomes more sensitive and of a larger breadth. Specifically, they expect more value in return for data used in marketing and data being sold to third parties, compared to data that’s used to improve a product or service.

For example, Mint, a personal finance website, will suggest a credit card that won’t charge foreign transaction fees if the user’s current card is used and a foreign transaction fee is incurred. Mint receives a commission from the referral if the customer decides to get that card, and the customer benefits from avoiding future fees.

Build Privacy in the Design

While organizations like Facebook are now backtracking and struggling to be make their data usage more transparent, forward-thinking companies should build privacy into the design, such as shared defaults, wider use of better encryption and HTTPS and using anonymity networks, thus creating more secure platforms with separate data banks, according to the United Nations Educational, Scientific and Cultural Organization (UNESCO).

Exercise Proper Data Governance

A mature governance program enables organizations to use data responsibly, legally and fairly while protecting the data. Data governance involves a deep awareness of how the data is collected, stored, used and retained.

Consider Consumer Perspective

Consider how consumers would feel if they knew how you were using the data. If a user would consider it creepy or unethical, that alone is a reason for pause.

Moving Forward

Moving forward, more established standards of data transparency and privacy should hopefully emerge. One measure of data transparency is the Electronic Frontier Foundation’s “Who Has Your Back?” report.

For the past seven years, this report has examined how major technology companies handle government data requests. Until best practices in this area, and other data usage practices, become more prevalent, consumers need to have as many tools as possible to review privacy agreements and remember that convenience sometimes leads to a loss in privacy.


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