Data trust handshake_Crop

At the recent IIeX conference in Atlanta, Futurice’s Tuomas Syrjänen discussed the Facebook/Cambridge Analytica scandal and what it means for companies’ relationships with data-empowered consumers.

Personal data is increasingly viewed as a valuable asset for tech companies and brands with the World Economic Forum famously describing it as the new oil. But after the recent scandal surrounding Facebook and Cambridge Analytica, companies taking a fracker-style approach to data mining will find themselves disastrously out of step with the expectations of consumers and regulators.

I believe a new data relationship is needed between brands and consumers. Here are five insights into how brands involved with consumer data should behave going forward.

Learn the lesson: don’t misuse personal data

Anxiety about the way companies and political lobby groups use our personal data has been building for some time. But there’s no question – the recent Facebook and Cambridge Analytica scandal has been a watershed moment. The extent of Facebook’s disregard for consumers’ personal data and the cynical misuse of it by Cambridge Analytica (CA), has provided a stark insight into the dark side of the personal data economy – namely how easy it is for consumer trust to be abused.

Facebook got off relatively lightly in terms of public reaction – yes, some consumers quit the platform, but it could have been a lot worse. In the future, platform and other personal data-driven businesses would be unwise to imagine another scandal will avoid consumer anger.

GDPR has arrived just at the right time for people wanting to challenge how corporations use their data. And I don’t just mean lone activists. Social media and instant messaging make it easy for motivated consumers to form global pressure groups and hold businesses who misuse data to account – by simple actions such as filing mass requests for their personal data.

At the very least, this kind of action could have significant financial repercussions for companies, in terms of wasted resources or fines. In the worst-case scenario, it could turn your brand toxic.

ethical approach to data

One of the consequences of Facebook/CA is that companies involved with consumer data should worry less about how much money they are going to make from it and start thinking of themselves as consumer champions, addressing people’s legitimate concerns about data use.

At IIeX it was reassuring to hear a growing call from companies working with personal data for a global form of ethical certification – such as MRS’ Fair Data accreditation scheme – to show that data they had sourced or bought, had been ethically sourced.

Under the MRS scheme, companies wishing to become Fair Data companies and use the Fair Data accreditation trust mark, must meet 10 principles. These include requiring companies to manage their data supply chain to the same ethical standards they expect from other suppliers and ensuring that ethical best practice in personal data is key to procurement processes.

an opportunity not a threat

If the tech sector and consumer brands can prove they are taking a new approach to personal data, there is a real opportunity to recalibrate the relationship with consumers. This presents the potential for people to be more involved in companies’ operations and decision making – a new playbook.

This could include treating customers as suppliers, offering them something in exchange for their data. It could mean inviting customers to contribute their personal data sets and get involved in co-creating new products and services tailored to their needs.

We are already seeing businesses such as UK mobile network Giffgaff and logistics business DHL actively involve customers in their businesses.

re-establishing consumer trust

The most exciting opportunities around data will only be realised with consumer buy-in. Imagine, for example, being able to share personal data more widely to create tailored services that help consumers manage their finances/commitments/health easily and more effectively.

In the financial sector this is the goal of EU directive PSD2. Meanwhile in the US, increased unbundling across all sectors including finance is encouraging players such as Simple and Moven to reinvent the banking experience and engage consumers with a lighter touch.

Let’s go a stage further and suppose data sharing could be extended to atypical partnerships between brands. Authorised by the homeowner, we could see the Nest smart thermostat share electricity use data with the homeowner’s banking app and an approved search engine, to make personalised recommendations around appliances which would fit the homeowners’ current budget and help reduce energy bills in the future.

a reliable system will need honest brokers

There is the prospect of personal data brokers/guardians, either virtual or human, who can help people monetise and protect their personal data. This could be the role of established brands in finance or insurance, if they can shake off negative legacy perceptions.

But there’s also an opportunity for new brands to seize the high ground. Data Wallet, for example, claims to be creating the first personal data management platform allowing users to take their data from platforms such as Facebook and Spotify, unify it in one wallet, control who gets access to it, learn from the insights and get paid when they share their data.

Alternatively, imagine digital platforms where consumers pool their purchasing aspirations and willingness to pay, then negotiate en masse with suppliers.

Tuomas Syrjänen is co-founder, AI Renewal, Futurice