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Staying on the right side of consumer privacy line – KPMG Report

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Article Synopsis :

Companies know more about their customers than ever before. As digital technologies proliferate, the line dividing ‘my’ from ‘our’ data moves depending on context and circumstance.

 The Digital Insurer reviews KPMG’s Report on Creepy or cool: Staying on the right side of the consumer privacy line - KPMG Report by Mark Thompson

Data privacy, a hot-button topic, is highly nuanced by data type, context, and region 

KPMG conducted a survey of almost 7,000 consumers across  24 countries to understand their attitudes toward personal data acquisition and use.  This report “Creepy or cool? Staying on the right side of the consumer line” is intended to help organizations tread the ‘creepy’ line and not cross it.

Unsurprisingly, people draw the line in dramatically different places, i.e., one person’s ‘creepy’ is another person’s ‘cool’. Over half of survey respondents are willing to share their gender, education or ethnicity online, for example, whereas less than 20 percent are willing to share their income, location, medical records or address. Other survey insights include:

  • 55% decided against buying something online due to privacy concerns
  • Most value privacy over convenience
  • Social media, gaming, and entertainment companies are perceived to ask for an unnecessary amount of personal information
  • In all markets except one, at least 75% of respondents are uneasy with online shopping data being sold to third parties
  • Over 2/3 of all people are not comfortable with smartphone and tablet apps using their personal information
  • Over half delete browers cookies and/or actively manage social media privacy settings
  • Almost a third use incognito modes when browsing the web
  • 25% use encryption to protect personal data
  • Around half would trade privacy in exchange for cheaper products
  • Income doesn’t seem to have an impact on whether people would accept less privacy
  • Education levels don’t seem to affect people’s views on privacy, of what’s creepy or acceptable

Indiscriminate use of personal data runs the risk of alienating consumers. This could also result in a divide between consumers and insurers with consumers withholding personal data – as it’s known consumers already invest in a variety of protection methods to secure their data online. What customers consider creepy or cool is highly nuanced, as the below infographics suggest:

 

Regulators are taking action with respect to data privacy, with implementation of rules such as the EU’s General Data Protection Regulation (GDPR). But the onus is on insurers—not regulators—to sort things out with clients. To this end KPMG recommends the following:

  1. Change old mindsets about treating customer data lightly; focus on increased transparency regarding data usage with customers.
  2. Onboard better privacy protection policies with proper data storage and maintenance initiatives with strict privacy controls.
  3. A strong privacy framework with timely communication across the organization and customer base is important. This helps tackle operational privacy issues and eases privacy-related stress with customers.

The report further outlines 7 steps to ensure your organization is privacy ready:

  • Step 1: Educate senior stakeholders so they understand what privacy means for your organization
  • Step 2: Understand the level of privacy risk to which your organization is exposed
  • Step 3: Understand the expectations of the individuals whose data you process and set a privacy strategy that aligns to this
  • Step 4: Understand your level of privacy maturity and set a strategy aligned to your target privacy maturity state – and your customers’ ‘creepy line’
  • Step 5:  Develop a robust plan to mitigate your privacy risks and deliver your target state
  • Step 6: Execute your plan. Introduce sustainable structures to help manage privacy risks and ensure compliance, but also providing a strong foundation to flexibly leverage personal data to create value for the organization, your customers and your employees.
  • Step 7: Monitor, maintain and repeat

The overarching message from the survey is that attitudes with respect to privacy vary by the data and usage in question, as well as the attitudes and location of consumers. This report contains a valuable trove of demographic and regional data to help you gain insights on prevailing customer attitudes.

Link to Full Article:: click here

Digital Insurer's Comments

There are two reasons, in our view, to take privacy seriously:

The first is the cost aspect. As regulatory authorities around the globe sharpen their focus on privacy, fines that were once measured in the tens of thousands for organizations caught mishandling, mis-collecting or mis-using customer data, will eventually rise to eight, nine, even ten digits.

The second is value creation. You think you know your customers, but do you? The average nonlife insurer has on average 3 customer contacts per year (versus 120 for technology companies). Active data gathering and analysis creates an enormous opportunity for insurers to get more feedback, more knowledge, from existing and potential customers. Monetizing data is what digital insurance is all about. But to monetize it you have to first acquire it, and that, as this report suggests, is as much art as science. Facility with data acquisition is a competitive advantage.

Link to Source:: click here

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