Bridging the Trust Gap: The Hidden Landmine in Big Data
June 21, 2016 by John Rose , Frederik Lang , and Alexander Lawrence
In This Article
âData misuseâ represents a previously hidden obstacle to achieving the full value from big data.
Data misuse occurs when consumers are unpleasantly surprised upon learning that data about them has been collected or that it has been used in new ways.
Misuse also occurs when they perceive data practices to be potentially harmful and feel that companies should not engage in them.
The steps companies take now to assess and address this risk will confer competitive advantage and head off the looming threat to their earnings performance.
This is the first in a series of articles exploring what really matters for organizations that collect and use consumer data.
Big data has the potential to be both friend and foe. The Boston Consulting Group conservatively estimates that trusted uses of big data and advanced analytics could unlock more than $1 trillion in value annually by 2020. (See â The Value of Our Digital Identity ,â BCG article, November 2012.) However, recent BCG consumer research has uncovered a previously hidden obstacle to successfully unleashing this enormous opportunity: data misuse.
Data misuse does not refer to a use of data disclosed in an agreement that no one reads when signing up for a credit card, mobile phone, or social media service; it is not even about whether a use actually causes harm to consumers. Data misuse occurs when consumers are unpleasantly surprised upon learning that data about them has been collected or that it has been used in new waysâthat is, outside of the original purpose for which it was gatheredâand when they perceive such practices to be potentially harmful and feel that the company should not engage in them. (An example would be when a company originally collected data in order to complete a transaction or ensure that potential customers are good prospects but is now using it for marketing purposes.) Our research suggests that consumersâ reaction to data misuseâdefined in this wayâcan cause them to reduce their spending with a company by about one-third.
Executives will not mitigate data misuse by writing even longer and more complex legal documents for consumers to ignore, or by working even harder to ensure that companies donât run afoul of regulations and legal agreements. Instead, company leaders at the highest levels must develop new ways to manage and use data, rather than confining the discussion to legal or IT, as it is at most companies. Even organizations that use data for completely legal and fully disclosed reasons are on a collision course with their customers. The steps companies take now to assess and address this risk will confer significant, long-term, and sustainable competitive advantage and head off the looming threat to their earnings performance.
The Weakened State of Consumer Trust
Issues of privacy and trust continue to be at the top of consumersâ minds. In fact, feelings about these issues have intensified over time. When we surveyed consumers across 20 countries and multiple generations in 2013, it was clear that they all cared deeply about the expanding use of âtheirâ data. (See The Trust Advantage: How to Win with Big Data , BCG Focus, November 2013.) For instance, in every generation and in most countries, consumers were five to ten times more likely to share personal data with an organization if they trusted that the data would not be used to harm them. Moreover, 83% of US consumers agreed that they needed to be cautious about sharing personal data onlineâagain with only small differences across generations and across most of the countries surveyed.
A new BCG survey of 8,000 consumers in the US and five European countries shows that these concerns remain at high levels in most product and service areas.
Data Innovation Summit 2017
30% off with code 7wData
Big Data Innovation Summit London
$200 off with code DATA200
Enterprise Data World 2017
$200 off with code 7WDATA
Data Visualisation Summit San Francisco
$200 off with code DATA200
Chief Analytics Officer Europe
15% off with code 7WDCAO17