Pictured: Hamza Khan, Founder and CEO, Suburbia
Data privacy and protection have never been so prominent in public consciousness. In early 2018, the Facebook-Cambridge Analytica data scandal shocked the world, revealing that the personal data of millions of people’s Facebook accounts was being harvested for political advertising without their consent. Following a year-long investigation, the Federal Trade Commission handed Facebook a $5 billion fine and a raft of new restrictions regarding its handling of personal data.
Closer to home, and in May 2018, mere weeks after the Cambridge Analytica scandal, GDPR came into effect. In the build-up, consumers were barraged with emails from companies requesting explicit permission to continue storing and using their data. And one year on, the ICO announced that more than 14,000 data breaches had been logged under the regulation. The commissioner has since handed hefty fines to the likes of BA to the tune of £183.39 million and Marriott International who were fined £99 million.
Small businesses might be forgiven for thinking that all this is a world away from their own concerns. But it is worth underlining that, under the GDPR, the ICO has the ability to impose fines of up to 20 million Euros or 4% of total annual global turnover (whichever is higher) – something that should give organisations of any size pause for thought.
Meanwhile, this heightened public awareness of organisations’ responsibilities regarding their personal data – this year’s Eurobarometer survey showed that about 67% of European citizens surveyed are aware of GDPR – means that even the smallest businesses face a serious battle to demonstrate that they are taking consumer concerns seriously.
The end of personal data monetisation?
Yet, personal data has been at the heart of many organisations’ strategies in recent years. The basic mechanism of mining user data and selling it to advertisers has been used by thousands, if not millions of organisations worldwide – often with enormous success.
No matter the type of sector you operate in and whatever the size of your business, the chances are that drawing intelligent insights from customer data helps to inform business strategies, from the development of whole new product lines to growing your overall market share.
In this age of heightened public awareness around the use of personal data – and heightened risk if things go wrong – the key challenge for businesses is to monetise and harness data whilst maintaining the highest possibly standards of security and privacy. And as ever, with challenges come opportunities. As customers become savvier about the responsibilities organisations have towards their data, forward-thinking businesses need to think about alternative ways to monetise and generate insights from data with thoughtfulness and transparency.
Monetising data, respecting privacy
Firstly, businesses need to think imaginatively about the types of data they have access to, and the ways in which is can be valuable. Personal data has long been recognised as highly commercially valuable, enabling highly tailored marketing and advertising campaigns. As we have seen, it also comes with a hefty side helping of regulation and responsibility.
As we move into a world of post-personal data, alternative data such as the data taken from point-of-sale (POS) transactions and satellite imagery, will offer greater insights into customer behaviours and buying patterns, providing enormous value in a wide range of settings.
From economists to asset managers, product designers and developers to city planners, anonymised and aggregated data can be put to use by a massive array of stakeholders. They aren’t interested in the personally identifiable information which is (rightly) subject to such tight privacy regulations. They are interested in macro data which can point to emerging trends and broad patterns – and this is data which many small businesses are generating.
Next, businesses need to think carefully about how to extract this valuable alternative data. Most organisations generate far more information than they utilise; Forrester, for example, has estimated that up to 73% of the data within a typical enterprise goes unused. There is no single reason for this, but it is often due to a combination of poor data architecture management, poor data quality management, and a lack of tools for extracting data in a way which enables tangible insights to be generated.
Sophisticated data extraction tools are being developed all the time, whilst the rise of artificial intelligence, machine learning and big data analytics mean that it is increasingly possible for even the smallest organisations to automate the harvesting of alternative data. The right technology partner can make this process seamless, secure and cost-effective.
Finally, businesses need to aggregate and enrich their non-personal data in order to make it more valuable – which means integrating it with information from other organisations and sectors in order to build a richer picture. This might mean, for example, combining data on the sales of cosmetics products nationwide with the production of recyclable packaging to see whether there really is a reduction in single use plastics.
Aggregated and anonymised data provides intelligent economic, social and commercial insights without compromising on privacy – because its focus is on volume, and identifying trends over time, rather than on individuals’ details. From there, the possibilities for actually harnessing that data are enormous. Small businesses may choose to create new revenue streams by selling that information to other organisations – or they may harness it internally as part of their product development and refining processes.
Unlocking the value of alternative data
There are three core steps to harnessing alternative data: identifying the data you have; organizing it in a useful structure; and enriching it with complementary datasets. Alternative data companies can help carry out these steps to allow data suppliers to focus on their core business and feel more confident about data protection.
The major data privacy scandals – and tighter data regulations – of recent years have not brought about an end to personal data monetisation, but they have centred the needs and rights of customers in businesses’ data strategies. With this focus on privacy and value, the future of data can only be better.