CIO Insider

CIOInsider India Magazine


Finding Mutuality in the Dichotomy of Data Privacy and Personalization


Data privacy is a growing worry among consumers around the world. People want personalization but at the same time they want to know how the businesses they rely on, are keeping their word on their rights to privacy. This has resulted in an interesting data dichotomy.

For most people discounts are a sign of having to get them thinking into buying the product or not. For businesses it’s a way of attracting customers to buy their product or even have them interested in other products if not that particular product. People tend to get carried away or oversee the huge privacy policy paragraph and disclose their email address for that discount. Certain businesses use these email addresses unethically.

AI Can do it All but Privacy is at Stake
Since a lot of companies count on artificial intelligence (AI) to provide personalized services or experiences, ethical concerns encompassing the use cases of consumer data have surfaced to the amygdala of people’s brains. AI may enable customization of products as per consumers’ desires and results in a delightful experience for customers. At the same time, it raises questions about privacy and the responsibility of businesses to keep consumer data confidential.

It’s a 50/50 situation with consumers wanting personalized services and having their data kept private. The Interactive Advertising Bureau (IAB) indicates that 71 percent of consumers prefer tailored advertisements fitting their interests and shopping patterns, while concerned about the consequences as a product of giving out their personal information.

For the number of ways entailing beyond IT systems, transaction processing systems and HRMS etc, companies are now surrounded by a sea of data and data analytics becomes the North Star leading way for actionable insights resulting in the quality of decision making processes. Powered by machine learning, data analytics traces out the patterns inside overwhelming amounts of data and reapplies them to make decisions on how to best produce helpful business results.

It Becomes a Matter of Winning or Losing the Customer’s Trust
Data analytics provides numerous options to collect customer data and its nature also resembles tracking customers’ activity on website or email interactions, through live converse and phone calls, or through feedback obtained from customer surveys. But the downside is, it could slip out sensitive information or create issues of bias that could lead to discriminatory differences. For instance, it could show ads based on stereotypical ideas of gender, race or economic status. Therefore, it’s crucial to protect customer’s privacy during interactions as it is also a matter of winning or losing their trust or doing business with them.

In the perspective of Rajan Sethuraman, CEO, LatentView Analytics, whose recent interaction with CEO Insights India magazine, says that data analytics can be crucial for organizations to make high-quality business decisions and optimize their processes. However, most organizations are still scratching the surface regarding the quantum of data they analyze and leverage. For instance, today, data generation has sky-rocketed with the increasing level of online interactions between organizational stakeholders via digital mediums. This leaves much room for analyzing this data and producing actionable insights on both sides of the business.

“One of the biggest challenges with data analytics is ensuring people’s privacy and their data’s confidentiality. Whether I am walking into a company as an employee, a retail (or e-tail) outlet as a customer, or a hospital as a patient, I am always in pursuit of personalized experiences”, states Sethuraman.

The Laws are Steep
India recently passed out its much awaited Digital Personal Data Protection Act this year. The act applies to personal data in digital form and is said to go into effect after 10 months. This Act is said to not provide grace time for compliance. In case of data breach, the data fiduciary is asked to inform the Data Protection Board of India (DPBI) and affected data principals in a manner prescribed by the Government. Its penalties for non-compliance involving taking reasonable security safeguards to prevent a personal data breach may result in a penalty of up to Rs. 2.5 billion (approximately $30 million). The Act does not contain a provision for awarding compensation to affected data subjects.

It's said by the new IT act that if any company or entity fails to execute a well- examined information security and safety procedure then that enterprise will be liable to pay damages to any party which gets affected due to their mistake. This new act also helps in understanding the new reasonable security rules, procedures, and practices. According to the Act, these new procedures and policies are made to protect and prevent the sensitive data from being in any danger like someone accessing it without any authority, or someone modifying it or telling it. To add it up, the new IT act tries to capture several aspects dealing with personal data privacy, cyber terrorism, and various other unethical practices.

Personalization as a Trumpcard for Business Competency
Since personalized services are a hit among customers, it becomes a trumpcard to maintain a competitive edge for the company among other industry players. Trying to balance personalization while maintaining a competitive edge and adhering to regulations is complicated. To maintain this business practice and maintain revenue, businesses need to understand how to balance personalization and privacy by implementing strategies into their standard security practices that allow for secure multi-party analytics.

But it doesn’t Come Off that Easy
Multi-party analytics has come an important way to meet these challenges with both respect to privacy and operational efficiency. Marketers have gone from using mass media for targeting broad demographic parts to launching precise targeting initiatives for activating against a collection of specific, individual identities. These practices have improved business insights and profitability, but could compromise privacy without the right tools and processes in place.

“One of the biggest challenges with data analytics is ensuring people’s privacy and their data’s confidentiality. Whether I am walking into a company as an employee, a retail (or e-tail) outlet as a customer, or a hospital as a patient, I am always in pursuit of personalized experiences”, states Sethuraman.

Few Steps for the Common Man
In the case of whether external service providers are managing privacy, the common man could perform a few steps to know whether the company is meeting business privacy objectives.

Verify that the customer data you share with your service provider(s) is being used for your business’s data analytics and not for any other purposes.

Question about options that mirror your business’s privacy priorities. You might be surprised by what's available.

Does your contract require your service provider(s) to hand over notice of any security or privacy incidents that they may undergo? Service providers should be suitable to share this information so that you can better communicate with your customers, if necessary.

Another question to consider is whether your service provider(s) are using Privacy- Enhancing Technologies, or PETs, to help manage privacy pitfalls? Certain types of PETs enable a service provider to analyze data without having to access the actual customer data itself. PETs help keep data anonymous, which protects your customers’ identities!

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