As data protection authorities start to dish out GDPR-related fines, businesses in the US must learn to better communicate their data-handling practices to customers. The pressure is on for businesses to seed trust in their user base.
New data protection laws like the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA) have raised the pressure on data-collecting entities in recent years. From state-owned institutions to big corporations, any entity that collects, processes or monetizes data is under heavier scrutiny from data protection authorities than ever.
Despite the past year’s global focus on GDPR and other regulations designed to give consumers more power over their data, 55 percent of respondents in a recent study still don’t know how brands use their data. The research by web biz Acquia reveals that 65 percent also don’t know which brands use their data.
Consumers are not willing to give brands a second chance to protect the integrity of their data, with 65 percent of respondents claiming they would stop using a brand if they learned that company was dishonest about how it was using their data.
“This means that businesses have only one chance to make sure their customers know that their personal information, and their privacy, is in safe hands,” the report notes.
Consumers typically wait at least a month before sharing any personal data with a new brand, underscoring their desire for trust. Along the same lines, almost half of respondents said they are more comfortable giving personal information to brands with a physical store presence. This finding suggests consumers tend to distrust online stores.
Data privacy legislation puts even more pressure on businesses facing consumer demands for personalized online experiences, forcing them to perform a balancing act of delivering custom experiences while being more careful than ever with customer data.
According to Acquia’s Tom Wentworth, the findings mark the beginning of a new paradigm where businesses need to engage customers on the data collection topic without going too far.
“Allowing consumers to opt in or out of data sharing will become more common over time as brands recognize that giving consumers back control of their data is not only the right thing to do, but it will also benefit their business in the end,” said Wentworth.
Furthermore, proposed U.S. legislation requiring Internet companies to disclose the actual monetary value of user data is expected to drive even more transparency efforts. Researchers believe those organizations that answer this call will be well positioned to seed trust in their user base.