Based on Cyder’s recent conversations with credit union and innovation leaders, it is abundantly clear there’s a growing divide between the data needs of businesses and the privacy demands of customers. This is pushing financial institutions to look for privacy-focused solutions that give more ownership and autonomy to customers.
Data is essential to making informed business decisions. Organizations that strategically leverage data in their operations are more likely to succeed in achieving their business goals. However, consumers are more privacy-conscious than ever, with 97% surveyed by The Harvard Business Review expressing concern over how their data is being used.
Building and maintaining consumer trust is essential to corporate growth, and businesses must balance their need for data without compromising consumer sentiment. When customers feel respected and trust an organization, they are more receptive to sharing their information.
Traditionally, companies collect as much data as possible to understand their customers. Yet the data they collect is often incomplete, and its accuracy is questionable. According to Deloitte, two-thirds (66%) of data professionals surveyed reported third-party data as 0 to 50 percent accurate. Many businesses struggle with acquiring reliable data, and when factoring in emerging privacy regulations, they’ll continue to face challenges if they do not prioritize their consumer privacy.
Corporations must adapt solutions that meet their data needs without compromising customers’ privacy rights and trust. Here’s how you can do it.
Educate Your Customers
Building trust begins with educating customers. Users are more receptive to engaging with a brand when they understand how their information is collected and used.
Additionally, businesses should inform customers on how their privacy is being protected. Privacy is now synonymous with good customer experience. Taking extra measures to educate customers on how your business safeguards their information increases user trust.
The Harvard Business Review found in a survey that 90% of consumers associate the treatment of their data with how they’re treated as customers. That being said, privacy practices are seen as a direct reflection of business ethics. This shows consumers are more willing to support companies that hold themselves accountable and value their customers’ privacy.
With the variety of direct-to-consumer communication channels available, keeping customers informed is a simple step that yields big results. Consider leveraging social media, email, blogs and webinars to reach and educate customers.
Gather Only Relevant Data
More doesn’t mean better. It may surprise you, but studies show that excessive data hurts business decisions, with 87% of leaders experiencing decision distress. Data needs to be analyzed. An excessive amount requires lengthier analysis times, more resources, and poses challenges in identifying useful information. Focusing on relevant data avoids potential overwhelm, ensuring data quality and a smoother business decision-making process.
Take automotive companies, for example. The Mozilla Foundation analyzed the privacy policies of 25 popular car brands, deeming it the worst product category for privacy. Car brands were found to collect highly sensitive information from customers without their knowledge. The data, often irrelevant (and highly invasive), involved categories such as “genetic information” and “sexual activity.” When privacy reports like the Mozilla Foundation’s get published, it sends a message that the company has little to no respect for their customers' privacy. Most consumers value their privacy and want to support organizations that respect them. This shows how excessive data collection poses internal challenges to businesses and diminishes customer trust.
Gathering relevant data creates opportunities to leverage more accurate data types, like zero-party data. Zero-party data is data that customers intentionally and directly share with a brand. Examples include gathering data through surveys, quizzes, and calculators.
Leveraging zero-party data carries immense benefits as the data comes directly from customers. It allows businesses to collect accurate data that directly addresses their initiatives. For instance, sending out a survey asking customers their thoughts on a product provides valuable insights that help businesses decide what features to include in upcoming products.
Businesses must respect their customers' privacy and focus on collecting relevant data customers are comfortable with sharing. Customers are willing to share information with companies if it means having access to improved offers and services. That's why incorporating diverse data types, such as zero-party data, proves advantageous. It cultivates trust and encourages customers to share information by enhancing their overall experience.
Provide Value For Data
In our digital economy, data is currency. Data powers every online platform and service we use daily, making it a valuable resource for business operations. Additionally, data also fuels emerging technologies like artificial intelligence (AI). Consumers are beginning to understand how vital their data is to business operations. Future trends indicate that involving customers is advantageous to driving growth as ownership over data increasingly shifts to consumers. Businesses must look for ways to build mutually beneficial customer relationships by providing value in exchange for data.
Providing value doesn’t have to be tangible or monetary. Offering value for data through experiential or functional means is just as effective. Customers can receive value in exchange through personalized experiences, exclusive offers, and time-saving recommendations. This way, businesses can meet their data needs while elevating customer experience.
Take PC Optimum, for example. Customers receive points and personalized offers when using their Optimum card in exchange for their data. PC Optimum gets valuable insights into their customer's purchasing behaviours, improving their services. On the other end, it benefits their customers as they save money and time through the discounts and services they receive.
Give Customers Control Over Their Data
Data ownership isn’t just a buzzword; it’s a future-oriented solution amidst the changing data ecosystem. Customers are more receptive to sharing their data when they feel in control. Giving customers control over their data bridges the relationship between corporations and consumers. Empowering consumers with agency over their information builds trust, knowing they can navigate a service or product that values their privacy. This increases opt-in rates as customers want personalized experiences that meet their needs.
The Rogers Preference Center is an excellent case highlighting how giving customers agency benefits business growth. Rogers gives their customers granular control over the communications they receive. Rather than being spammed with bulk emails, customers can opt out of emails they deem irrelevant. For instance, customers can opt-in to receive promotional emails if they want to be notified of exclusive offers. In Rogers’ case, giving customers control results in higher engagement with communications and lower unsubscription rates. This is one of many examples of how empowering customers with control boosts user engagement.
Let’s apply this to data privacy and look at what we do at Cyder. Financial institutions partner with Cyder, sending out our browser extension to customers. Once users download our browser extension, their browsing data is kept safe and secure in a vault. Customers have control over the information they want to share and are rewarded for sharing their data through redeemable gift cards. This way, financial institutions have access to real-time data from their user base, all while empowering their customers through ownership and rewards.
Balancing consumer privacy with corporate data needs is often viewed as a challenge. But we at Cyder see it as an opportunity. Efforts to satisfy corporate data needs should be propelled by sustainable solutions that benefit both parties in the data ecosystem. Businesses can develop mutually beneficial solutions that boost growth by educating customers, leveraging transparent data practices, providing value, and giving customers control over their data.
Cyder is designed to bridge the gap between corporate data needs and consumer privacy. If you’re looking for a privacy-focused solution, we encourage you to book a demo with Cyder.