By Elan Amir, CEO, MeasureOne
Consumer data is big business, which should reach $234.6 billion by 2026. There has never been so much consumer data available online, and the collection and sharing of personal data continues to be the widely accepted standard for doing business. Today, consumer data sharing relies primarily on data aggregators that collect, organize, and store large amounts of consumer data and sell that data to businesses. There are a lot of problems with this data sharing model (the Facebook and Cambridge Analytica debacle comes to mind), however, a few stand out as particularly glaring: the high cost of data, its poor quality, and perhaps most importantly, the inherent betrayal of consumer trust.
So, is there a better approach to sharing consumer data? The notion of customer experience has been almost exclusively limited to product development and marketing. Therefore, data sharing has not been seen as a customer-oriented business. On the contrary, acquiring and sharing data has largely been treated as a technology function, for which aggregation is an acceptable solution. A truly customer-centric approach to data puts the consumer at the heart of the sharing experience and treats them as an integral part of product development. This alternative view of data processing as part of the customer experience elevates the entire field of collecting and sharing consumer data to the level of a company’s core products and services.
What consumers want
To understand what a consumer-centric data sharing experience looks like, we first need to understand what drives the consumer. In 2021 alone, there have been 5,250 confirmed data breaches. The backdrop to this terrible data security record is two seemingly conflicting interests that have clearly manifested themselves in consumer behavior. For one thing, as a result of these data breaches, consumers are becoming increasingly savvy in their understanding of data privacy and expecting greater control and transparency over their personal information. From government regulators to consumer advocacy groups and individual consumers, there has never been more scrutiny and emphasis on maintaining and enforcing consumer data privacy rights. On the other hand, consumers have never been more willing to share their personal data to unlock innovative and convenient services. In reality, consumers regularly and willingly share a wide range of personal data, including financial, educational, income, real estate, etc., in exchange for services such as loans, job offers, leases and discounts.
Ask permission, not forgiveness
In response to these competing demands, companies must find ways to get the data they want without undermining consumer trust. Historically, companies collected personal data in anticipation of its value one day, even if they didn’t need it immediately. Taking consumer data without permission and asking for forgiveness only when consumers find out may have worked early in data collection. This method has no place in a world where consumers demand and deserve trust, transparency and respect for their data.
Instead, companies must put the consumer at the center of every data transaction. They must encourage consumers to share their data in exchange for products and services. At the heart of this transaction is the consumer’s explicit permission to access and use their personal data directly from their primary data source, usually their online account.
Give control to the consumer with consumer authorized data (CPD)
This model of sharing consumer data with direct access to the consumer’s personal data is called consumer authorized data (CPD). It is an essential part of customer-centric data sharing. Consumer Authorized Data unlocks data that resides in a consumer’s authenticated online account with the consumer’s direct authorization. In a CPD transaction, a consumer chooses to provide access to their personal account for the purpose of sharing the data present in that account with a company requesting a valuable exchange. One of the oldest and most widely adopted examples of CPD is access to bank account information in payment apps such as Venmo and Paypal. Other examples include sharing income or employment data to secure a mortgage loan.
CPD offers many advantages. First, it is inherently customer-centric. The customer experience is an integral part of the transaction. Consumer authorization defines both the scope and limits of access and use of shared data, creating the foundation for a trusting and transparent customer relationship. Second, CPD is vastly superior in several important aspects to other data acquisition methods. It’s real-time, up-to-date, and straight from the main data source. This means better, broader data that leads to better business decisions and better outcomes for consumers. Finally, in a demonstration of the promise and power of consumer-centric design, consumers engaged in CPD transactions are regularly willing to grant access to new, untapped areas of their personal data, creating a virtuous circle of business innovation and consumer benefits.
Towards a better future
We live in the age of data and are just beginning to harness the power of a consumer’s data to deliver personalized benefits and expand opportunities. Consumers are willing to share when they receive value in return. Accessing this data is a big responsibility for businesses and requires moving beyond old ways to adopt a customer-centric approach. Consumer-enabled data brings business and consumer interests together, laying the foundation for a healthier, richer, and more robust future of data sharing.
About the Author:
Elan Amir brings a unique combination of management, strategy and technology expertise, leading organizations from start-up to scale. Prior to joining MeasureOne, Elan served as Chief Product and Technology Officer at SpringboardAuto.com, a SaaS-based auto finance company serving consumers and financial institutions, and at Prosper Marketplace, a leading lending company. on the market. Previously, Elan served for nine years as CEO of Bivio Networks, a provider of cybersecurity solutions. Elan received his Ph.D. and MS. in Computer Science, as well as a BS in Electrical and Computer Engineering from UC Berkeley.