Data is to the digital revolution as oil was to the industrial revolution—that was the comparison drawn recently by The Economist. The publication went on to note that “both also fulfill the same role: producing crucial feedstocks for the world economy.”
Increasingly, the world economy is becoming a borderless economy as there are fewer and fewer impediments to any business choosing to operate globally. That creates more opportunity, but it also creates a different set of challenges, especially with the European Union’s General Data Protection Regulation (GDPR) on the horizon.
The Economist continues: “Digital information is unlike any previous resource; it is collected, refined, valued, bought, and sold in different ways. It changes the rules for markets and it demands new approaches from regulators. Many a battle will be fought over who should own, and benefit from, data.”
The GDPR is firing one of the first salvos in that battle. The regulation goes into effect in May 2018 and protects individuals’ data ownership rights, requiring organizations that do business or have customers in the EU to ensure certain protections over a consumer’s personal data.
This includes basic identifiers like name, address, and other ID numbers. It includes health, biometric, racial, ethnic, and sexual orientation data as well. It also includes the data subject’s right to be forgotten, meaning the data holder must be able to delete the individual’s data on demand.
Big data helps make the borderless economy possible by allowing work to be done seamlessly around the world. Companies use big data to solve challenges that arise during global business operations and to stay competitive within their industry. Rather than seeing the GDPR as a challenge to that global reach, businesses should see it as a chance to differentiate themselves from competitors and a way to use big data assets to create stronger connections with customers.
The GDPR compels businesses to evaluate their data handling and security practices—some businesses are lax in this regard. Consumers are concerned about the data management practices of companies they do business with, and they want assurance that their private information is secure.
Surprisingly, consumers feel more strongly about this than businesses do. A 2017 study found that 79 percent of consumers believe an organization is obliged to control access to their information, but less than half of CMOs and IT security personnel agree. Thus, the GDPR presents a chance to correct lax compliance strategies and focus on what matters to customers.
Data protection is critical to digital commerce. With smart, transparent security policies, companies can prove that they take the burden of protecting personal data seriously. The hard work to build trust is a smart long-term move because it makes customers more inclined to increase their digital business transactions with the company—and perhaps decrease transactions with a competitor that is less transparent.
The GDPR recognizes data for the valuable asset that it is. Businesses actively protect their real and intellectual property, and they must apply the same rigor to their data assets. The potential value increases as the volume of data increases, and the more value it has, the more oversight and protection it requires and deserves.
Businesses now collect structured and unstructured data in discrete pockets all over their enterprise. To extract the full value from their big data, businesses must take a holistic and global view to determine how best to connect those pieces in useful, usable ways. These steps must be taken primarily in service to their customers, but also as a way to outpace competitors that are slow to embrace the value of data.
For businesses, the GDPR should create the impetus to build more robust data operations. As businesses become more skilled with data handling, their data analysis will improve. The result should be more targeted and effective customer offerings. This strategy will help businesses see more easily when and where the customer experience falters, allowing them to find new and better ways to engage customers and identify their most pressing needs.
The impact of this new regulation should be quite illuminating to consumers. It will shine a light on the businesses that are equipped to operate smartly and securely in the borderless economy—as well as on those that are not.
Do you have questions about what the GDPR means for your business? Check the first in a three-part series that describes the implications of this regulation.