Privacy Challenges – Part 1: Data is the new oil

Sep 6, 2016

We have made the promise to help our clients understand their privacy challenges and enable them to tackle them in a way that meets both their business requirements and regulatory requirements. Some time ago, one of our clients posed a central question: “What are key privacy challenges that organizations currently face in your opinion?” So, we decided to create a series of blog posts describing five key privacy challenges that touch organizations regardless of their industry.

The challenges, as we have named them, are:
1. Data is the new oil
2. Changing regulation
3. Lack of tools and best practices
4. Lack of professionals
5. Implementing privacy throughout the organization

Data is the new oil

Personal data is said to be the hottest commodity on the market in today’s network society. Megatrends such as Big Data, Smart Cities, Internet of Things and rapid development of mobile technologies are driving the utilization of personal data. As the cost and ease of data processing have lowered, companies are constantly seeking to refine data into operation fuelling insights. In fact, some of the world’s most valuable companies such as Google, Facebook or Amazon base their entire business on effective processing of personal data.

However, in the same time, increased processing of personal data has evoked concerns about an individual’s right to privacy. For example, according to Data Protection Eurobarometer (2015), 67 % of Europeans are concerned not having complete control of the information they provide online, and 65% feel uncomfortable providing personal information online.

This double-bind of the business value of personal data and an individual’s right to privacy have given (personal) data the nickname as the new oil. Just like oil back in the days, organizations have had generous amounts of data to process and some have used it somewhat carelessly and have not taken adequate care of protecting the data. However, due to rising consumer expectations as well as stricter regulation, organizations have to be mindful about the data they collect, process, analyse and store as well as how they protect the data they possess.

Having your customer’s confidential information leak to an unwanted third party can be just as bad for your business – if not even worse – than a major oil spill. The average cost of a single data breach is around 4 million euros, and if the breach involves data classified as sensitive such as health or financial information, the costs soar quickly. Not to mention the damage a breach causes to your reputation and brand.

Stakeholders, customers in the front line, are demanding companies to take better care of their data handling procedures. Companies have a strong motivation to take action, and IAPP-EY Privacy Governance survey (2015) results show that large companies already acknowledge the value of good data protection practices and invest in their privacy programs.

Acquiring and maintaining consumer trust will define the future of many current services that rely on the processing of our personal data. For example, in the global movie market, privacy and security concerns of users have become the biggest challenge for vendors. In today’s marketplace, companies wishing to extract value from their customers’ data have to be able to demonstrate both to their customers as to the authorities that they provide adequate protection to their customers’ privacy and comply with regulations.