3 tips on customer data collection and protection

Consumer data insights are transforming experiences and unlocking market opportunities while requiring new risk considerations around data protection.

In brief

• Customers know their data is valuable. Many are willing to share access to their data on an as-needed basis if they receive something valuable in return.
• Consumer data provides numerous insights, but data collection without proper protection exposes a company to risk.
• Even if they intend to benefit customers, companies must consider data protection at the onset of data collection. 

Customer data allows businesses to discover deep insights to engage customers, stock the right mix of products, design pricing and underwriting models, and curate experiences for their biggest fans. However, companies face potential pitfalls around data protection, using data strategically and gaining customer trust. Here are some risks to consider — and ways to address them.

1. Data collection: Collect data for the right reasons

Businesses need to evaluate not only the data they collect but also why and how they are collecting it, as well as how they can use the data in a secure and transparent manner. “They must understand that data collection represents an inherent risk as well as strategic business opportunity for both businesses and customers,” says Reid Sawyer, Managing Director at Marsh.

To capture, store and use their data, customers need to feel that there’s a clear exchange of value. Tech entrepreneur and angel investor Marc Porat, Head of Planet X, captures this customer mindset: “There’s a sense that my data, my privacy and who I am is my property, and I’m willing to rent it to you if I get something of value in return.”

In the October 2022 EY Future Consumer Index, 65% of respondents surveyed globally said they would share data to receive tailored promotions and deals. One in four said they would share publicly attributable personal data in exchange for a pre-populated shopping cart based on past purchases.

“Build a trustworthy brand, one that people will engage with, and build a value exchange,” adds Chris Crayner, Chief Digital Officer for NBC Universal — Parks and Resorts. “If I can get you to do that, and you willingly give me your data, that is the cleanest and most authentic relationship you can build.”

2. Data protection: Use data proactively

Companies spend a lot of time collecting and interpreting data, sometimes using automation and machine learning to analyze it and drive decisions, Sawyer says. “The problem is now we’re looking backward,” he says. “The question becomes: How can you start to take the data and data science to do some predictive modeling about where your organization sits today, and where that organization is going to be tomorrow?”

The answer isn’t always clear in the age of artificial intelligence, digital assets, the Internet of Things, Web3 technologies and smart contracts. Still, businesses must ingrain the ethos of data integrity into their operations no matter what analytical or predictive data resources they are implementing — it’s what creates a strong foundation for the design, implementation and usage of data.

“You have to start laying out the customer experience, the digital perspective. Services will come and go over time, but that primitive layer has to be right,” Crayner says. “As we start to deploy models across all of our businesses, the model of integrity becomes a second component of that. Once we solve that, then I think we really start to accelerate.”

3. Consumer data: Protect and secure what you collect

Safeguarding data is an imperative in today’s business landscape, especially with quantum computing on the horizon. Quantum is bound to create enormous opportunities, but businesses must acknowledge and prepare for the challenges and risks associated with it.

Porat recommends that leaders take steps now to protect their organizations against quantum threats: “I can’t stress the urgency enough. It completely changes the entire data landscape.”

“Businesses must begin adding layers of security around their data centers and APIs,” he adds. “You don’t have to wait for quantum computers. You can start right now.”