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Data is a currency - are you giving a fair exchange rate?

David Reed, director of research and editor-in-chief at DataIQ has written an article entitled 'Data is a currency - are you giving a fair exchange rate?' for techUK's Data Driven Economy Week. 

Data is a currency - are you giving a fair exchange rate?

David Reed, director of research and editor-in-chief, DataIQ

If you are developing a big data strategy for your organisation, you need to go through a two-step planning phase. Firstly, you need to identify whether the data sets you plan to use are categorised as personal information - or might become so under the new General Data Protection Regulation (GDPR), such as location data and device ID. Secondly, you need to be confident that this data resource will be sustainable. In other words, will individuals provide you with permission to capture, manage and use their data above and beyond its role in any transaction.

This second step might seem unnecessary in the wake of a last-minute change to GDPR which accepted marketing as a legitimate business interest and removed the need for a separate consent. However, a recent guidance note on direct marketing published by the Information Commissioner’s Office makes it clear that any marketing for products or services beyond the original transaction are effectively unsolicited and therefore do need their own consent.

If that is the direction of regulatory enforcement which the ICO will take when GDPR becomes law, then it makes one thing certain - companies will need to take their customers with them on the data journey. Trust, confidence, security and the data-value exchange will be central not only to any big data strategy, but also to the positioning and meaning of the brand. Any company that can be transparent and fair towards its customers has nothing to fear - those which rely on a degree of sleight of hand or a policy of “don’t ask, don’t tell” could find things more difficult.

So what do consumers think about the increasing number of requests they are getting for their personal information and permission to use it? DataIQ has just carried out research using Research Now’s UK representative online panel of 1,000 consumers to find out. Those for whom sharing data is not a problem if they trust the brand are not as numerous as might be thought - our survey found they made up just 16 per cent of the population. That is not a big enough base on which to build a sustainable big data project.

Fortunately, a further 33 per cent take a rational view that they will share data if the company explains to them why it is needed. This is already a legal requirement under the Data Protection Directive and the “Cookies Directive”, with companies obliged to publish a privacy notice at the moment when they capture data and ask for permission.

But more challenging is the fact that half (49 per cent) say they prefer not to share their data unless it is necessary. This is a higher proportion than has been found in other surveys - the DMA found only one quarter of consumers expressing this view. How the question is posed will have been different, of course, as will the consumer’s notion of what is meant by necessary.

For every organisation placing data at the heart of its business model, this is now the critical issue. Is it clear to the individual why their information is needed and is the data-value exchange - providing access, services or benefit in exchange - fair and balanced? The ICO is clear that consent must be freely-given and can not just be bundled in with terms and conditions. Is your business making it clear that data is a separate currency from cash when a transaction is taking place?

DataIQ is running a series of events looking at the business impact of GDPR and debriefing our research. For more information and to book tickets, go to http://www.dataiq.co.uk/impact2016 

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