Consumer custodians are the future of data
By J Cromack, Chief Growth Officer at Edit
The current data exchange model between organisations and consumers isn’t fit for purpose. Most consumers are wary of data access requests due to opaque practices on the corporate side. There’s often a lack of clarity about exactly what information is being gathered about them and how it will be analysed or shared.
Although 71 percent of consumers still desire personalised interactions with companies, 73 percent are worried that they won’t see any benefit from allowing brands to access their data. Consequently, we’ve reached a data deadlock: organisations aren’t always able to offer the bespoke experiences their customers want because a reticence around data has become ingrained.
This poses a problem for both companies that are unable to meet consumer expectations and consumers themselves, who miss out on all kinds of tailored benefits and rewards. There’s only one way to successfully navigate this impasse, and it involves making consumers the custodians of their own data in a new exchange model.
A fresh data perspective
Data sharing has become enough of a mainstream topic in recent years that most people have an understanding of the value their personal information holds. So it’s understandable that they’re unwilling to give it up without fair compensation.
Equally, it’s unrealistic to expect individuals with busy lives to spend time deciphering complex data access requests. Or to keep track of which particular companies hold specific information about them across a range of platforms and accounts.
This situation benefits nobody, and the only way it can be improved is by adopting a fresh perspective on how data exchange should take place.
How could this look in practice? The clue is in the name. Personal data – it pertains to the individual and should remain within their custody. So it makes sense to put consumers at the centre of a hub and spoke data sharing model that would benefit organisations and consumers alike.
Most people would feel more comfortable adding information about themselves to a vault that remains under their jurisdiction. This means that rather than brands trying to coax information out of consumers, they would be much more likely to proactively provide it – especially after experiencing the positive impact of doing so.
By sharing information relating to their hobbies, pastimes and professional interests to the vault, consumers could allow brands to use this data creatively and develop innovative new experiences for them.
There would of course be some significant considerations around legislation and compliance for a reworked data-sharing model – but the EU Data Governance Act could offer a suitable foundation for putting this into practice. It would be a case of establishing a clear set of rules for all consumers and organisations alike to follow.
Remodelling data ownership
A democratised, decentralised data-sharing model could also draw inspiration from the vision that Tim Berners-Lee outlined for what he would consider a true Web 3.0. An individual’s personal data vault would effectively function as a digital ID card, and a common web protocol would be needed to underpin a data ‘pod’ of this nature.
The functionality of a new data-sharing model would need to allow consumer vaults and third-party applications to interact with each other, with information also flowing from organisations to individuals where appropriate and authorised. This would help to maintain data integrity and allow it to deliver maximum value for all involved in the exchange.
Overcoming the hurdles
There would of course be some obstacles to overcome in making consumers data custodians. For example, language standardisation for data dictionaries and developing a simple, intuitive user interface for all to use would require careful consideration and creative thinking. But the effort required to negotiate these roadblocks would generate a significant ROI.
Organisations would not only have a much clearer idea of when to target an individual, but also access to all the information they could need to decide how best to interact with them.
In particular, companies could use third-party data to predict the consumer buying cycle and intervene at the optimum time. Let’s say an individual uses an app to identify a piece of classical music that is playing in a cafe. This would be an ideal time for Apple to contact that person offering a discount subscription to its new classical music streaming service.
And beyond the potential to increase revenue, organisations would also massively reduce the costs and security risks associated with stockpiling customer data.
Taking the first steps
Getting to the stage where consumers are true data custodians will be a gradual process and will require several steps rather than a sudden transition. But this means organisations that move quickly have the opportunity to establish themselves as leaders in the field.
A good example of how to move towards more democratised data sharing based on existing architecture would be customer loyalty cards. Large retailers in particular often offer multiple complementary services including banking, insurance and mobile networks. But they could improve synergies further by allowing third-party applications to interact with the trove of data that a loyalty card provides – with consumer consent, of course.
Steps like this can help organisations to add further value for their customers. For example, allowing a fitness tracker to interact with a customer loyalty app could help a supermarket make healthy product recommendations based on an individual’s fitness goals, while the fitness app could offer recipe suggestions based on purchased products.
Making consumers the custodians of their own data is in everyone’s best interest, and the complexities of technical implementation are far outweighed by the value that a democratised data-sharing system could offer to all concerned.