The data question: How should businesses be planning for future EU regulations
Addressing the privacy issues
The technological evolution has driven the growth of customer channels, changed the balance of the brand-consumer relationship and perhaps most crucially, been responsible for the generation of vast amounts of data. For those who have invested in the correct initiatives to collect, understand and use this insight to build deeper, more personalised relationships with the customer, the benefits are clear. The increased volume of data, however, has brought with it questions around privacy and data protection and a growing number of cases of data breaches. In an attempt to address these issues, the E.U is expected to move a step closer to determining Data Protection Regulations (DPR) over the next 12 months, but initiatives aren’t expected to come into effect until the end of 2016 at the very earliest.
Whilst businesses will welcome the shift being made to ensure regulations are catching up with the data evolution and ensure data privacy is being met responsibly, the proposals currently being suggested could bring a multitude of obstacles. For businesses where the recent explosion of data, and the way it is being used, has had a significant and positive impact on how they are approaching engagement, the effect of the introduction of the DPR will be vast, significantly disrupting growth and progress of the many organisations.
An inescapable impact: felt across businesses large and small
If brought into effect, the DPR will be felt across organisations large and small, from blue chips to SME’s. Whist SME’s are likely to be more nimble and able to adapt with greater ease, the financial burdens the regulations will place on them will be more challenging to overcome. Data has become the life blood of some many businesses in recent years, key to enhancing customer relationships and engagement, the impact of these proposals will be inescapable. It seems ludicrous that whilst we’re being constantly reminded that successful customer relationships are achieved through data-driven targeted, personalised communications, the entire approach to achieving this effectively could be placed in jeopardy. Businesses will no longer be able to target market-specific profiles making it a bit hit and miss and they won’t be able to collect individuals’ data without explicit consent, so tailoring brand experiences will become extremely difficult. All in all, ROI is likely to be significantly lower.
This will see vast upheaval in what has become common practise for organisations looking to deliver better and more personalised customer experiences, required if they want to establish long term relationships and see the all important results. Additionally, the growth and evolution of industries is likely to suffer, as organisations will lack the insights that enable improvement and innovation to occur. Whilst we want to ensure the correct measures are in place to address customer concerns over data privacy, in a fast paced and ever changing world, such extreme restrictions will really place businesses at a significant disadvantage.
Keep financial costs front of mind
Transparency, self-regulation and high quality customer service remain vital
As data protection and privacy has become increasingly complex over recent years, uncertainty around how the DPR will impact businesses in the short and long term is to be expected, so keeping the DPR updates on the radar are crucial. All new initiatives of this scale take time to integrate, particularly when it is such a sensitive issue. Organisations must remain up to date on developments to ensure they are capable of adjusting as more details are revealed.
Data privacy is certainly front of mind for customers, and rightly so; no one is disputing the importance of acting responsibly when it comes to the issue. As ever, organisations that want to deliver long-term success should be illustrating commitment to self regulation, placing customer security at the forefront and being clear in their customer communications throughout.
The regulations will force organisations to tighten up on their own self-regulation, to avoid incurring unplanned financial costs or legal action, but this doesn’t mean to say organisations can’t take action before then to ensure they are continually focused on delivering the best customer service; not just when forced to.
Ultimately, transparency and openness is vital for building a mutually beneficial relationship that has longevity required to weather the DPR and achieve a more consistent partnership overall. With a recent stat revealing that 56% of customers are worried about the internet eroding their personal privacy (The Drum), it’s the organisations that can illustrate that they have clear processes in place to manage information securely that will be in a better position to gain the trust of the customer and maintain long-term business relationships.