Consumers have shown their willingness to share their personal information with businesses in exchange for perks like discounts at the grocery store and free cups of coffee. But it turns out they don’t love turning over that data nearly as much as businesses think they do.
A new global survey from the Harvard Business Review Analytic Services sponsored by Mastercard found that while 60% of executives believed consumers think the value they get in exchange for sharing their data is worthwhile, only 44% of consumers actually felt the same.
“There’s this disconnect because most companies don’t put the consumer at the center of everything they do,” says JoAnn Stonier, Mastercard’s chief data officer. “They’ve been using this data without ever considering how consumers feel about it, and just assume what they’re doing is what consumers want.”
As consumer awareness of how companies collect their data has grown, so too have their privacy concerns and demands that the exchange be more equitable. Nearly 70% of the consumers surveyed said businesses reap more benefits from that data collection than they do. Almost three-quarters of consumers in the HBR survey said they pay attention to how companies collect and use their data. That means to increase the value consumers assign to data sharing, companies need to prioritize its ethical use and improve their data practices, says Stonier.
“Personal information is just that — personal,” Stonier says. “It’s becoming increasingly important for businesses to be thoughtful, ethical and accountable in how they collect and protect it.”
Yet even though 88% of executives surveyed said consumer concerns are a top consideration in their company’s data practices, just 51% said they prioritize best-in-class security and privacy to prevent personal data from being compromised. Only 36% prioritize anonymizing or de-identifying data before it is shared or analyzed, and less than a third prioritize giving consumers full transparency into how their personal data is collected, used and shared.
With 62% of consumers ranking fraud and identity theft as their No. 1 concern, it’s more important than ever that businesses prioritize keeping users’s data safe. Anonymized data, for example, can still be used in all sorts of ways that benefit consumers including personalized rewards, improved convenience and specialized new products.
“These results reinforce the importance of using personal data responsibly, and the need to ensure consumers are at the center of every data use conversation,” says Dimi Dosis, president of Mastercard Advisors. A third of consumers say they don’t want their information shared with third parties, but only 10% of executives saw this as a concern.
“It’s simple,” Dosis says. “The more data that is generated, the more security and privacy should be high priority.”
For businesses, that means building accountability and integrity into their data practices, making a commitment to accuracy, quality and innovation and actively working to minimize bias. It also requires transparency in how consumer data is being used. About a third of consumers said they wanted more control over how their information is used. The survey found, however, that just 22% of businesses prioritize giving consumers that control. There are significant consequences for businesses that don’t get data privacy right. Close to half of consumers said they stopped shopping with a retailer because they were uncomfortable with its privacy statement.
That’s why Mastercard launched the Data Responsibility Imperative last year, to encourage organizations to work together to safeguard consumer data privacy, building on Mastercard’s core set of principles guiding the ethical collection, management and use of data — consumer owns it, controls it and should benefit from it, while the organization that collects it should protect it.
Moving forward, consumers have a list of specific actions they want to see businesses take up over the next 12 months. Those include regularly requesting consent to use personal information, giving customers more control over how their information is used and a moratorium on sharing customer information with third parties if consumers don’t receive value in return.
“That isn’t a surprise,” Dosis says. “At Mastercard, we believe consumers should benefit from the use of their data, and that their data should be used to make life easier and richer. But clearly more work needs to be done by organizations in order to close the gap.”