Prioritizing privacy can maximize market share

Editor’s note: Brian Kane is co-founder and COO of data privacy software company Sourcepoint, New York

data security concept with digitized locksAs data breaches continue to compromise personal data, alarm bells are ringing loud and clear about data privacy, and product and data leaders need to pay attention. Privacy is now surpassing security as a top consumer concern and companies that continue to ignore this reality do so at their own peril. 

This is not a new problem, of course. Our current privacy crisis stems from years of neglect due to users not understanding how services collect data, lax regulations, a general disregard for consumer safety and skyrocketing data values.  

Now, the issue is coming to a head. Companies are facing a three-pronged campaign from consumers, regulatory agencies and privacy-centric competitors. 

The growing issue of data privacy and trust 

The main problem at hand boils down to consumer trust, which companies are repeatedly misusing.

According to one landmark study, the majority of Americans feel as if they have little control over the way companies collect data about them. Approximately 81%  of the public believes that the potential risks they face due to data collection outweigh the benefits. Further, 62% feel that it’s not possible to go through daily life without companies collecting data about them. 

Add it all up, and privacy concerns now directly impact consumer purchasing decisions. According to McKinsey, 71% of consumers would stop doing business with a company if it gave away sensitive information without permission. 

There are consequences for breaking consumer trust. Continuing to violate it could result in more than lost wallet share.

Data privacy crackdowns are coming 

Rising consumer concerns about data privacy are forcing the government to take notice. The era of data privacy as an afterthought is ending, with companies facing widespread crackdowns from government agencies at the state, federal and international level. 

At the federal level, support is gathering for a Data Protection Act that would establish a new government agency for enforcing federal privacy laws. In addition, the proposal clarifies data collection and usage practices and prevents companies from reidentifying users as they access digital properties. 

It remains to be seen how this will play out. In the meantime, states are taking matters into their own hands. At present, California, Colorado and Virginia have specific privacy laws protecting consumer data. This is the start of what’s to come, with hundreds of pending privacy bills across all 50 states, territories and the District of Columbia. 

With no clear road map in place for a federal privacy framework, more and more states will continue to push privacy restrictions closer to home. As a result, organizations face increasing complexities and risks as they now must adhere to multiple U.S. laws and regulations, as well as evolving EU regulations for the General Data Protection Regulation. 

How companies are responding to the new data privacy landscape

As regulatory and consumer pressure ramps up, companies are naturally adjusting their privacy strategies – with some further ahead than others.  

For example, Apple’s new developer tools through Xcode Cloud help advance development and innovation while still protecting consumer data. Developers can now access new tools and APIs with privacy-friendly analytics, allowing them to create applications without fear of jeopardizing consumer trust. 

At the same time, Facebook is dealing with the lingering fallout from its WhatsApp privacy gaffe. In May, the company threatened to limit functionality for users who don’t accept its new privacy policy. After facing heavy backlash, Facebook walked back its statement and changed course. 

However, questions still abound about Facebook’s motives and overall privacy stance. This is one of the reasons why secure messaging platforms like Telegram and Signal are surging in popularity. Amazon is also entering into the fray; its recent acquisition of encrypted messaging app Wickr suggests that Facebook faces rising competition in this space.  

Separately, TikTok is also drawing heat from privacy advocates. Despite tightening privacy controls for users under 18 earlier this year, the company is now collecting biometric identifiers and information from user content. Making matters worse, the organization is also facing a $1.7 billion lawsuit in the Netherlands for collecting children’s data.  

Add it all up, and companies like Facebook and TikTok disregarding privacy merely opens the door for someone else to come along, prioritize the issue and disrupt the market. 

Privacy and trust – key differentiators when addressing data privacy concerns

There is a strong case for following Apple’s lead and taking a privacy-first approach as consumer concerns and regulations continue to mount.

As Gartner explains, brands that take steps to proactively address consumer concerns can earn customer trust. Protecting customers builds stronger relationships while reducing anxiety and preventing problems before they occur. 

Companies ultimately have an opportunity to capitalize on these shifting consumer sentiments, using privacy and transparency as powerful differentiators. Prioritizing privacy can maximize market share while helping you avoid negative press and reduce your exposure to penalties and lawsuits. 

Focusing on privacy and trust can also help companies remain competitive and relevant as the market becomes increasingly saturated with privacy-centric competitors. The key formula for succeeding in this new era of widespread concern starts with providing powerful digital services that offer maximum privacy capabilities, as well as full data transparency and control. 

On the flip side, continuing to collect large amounts of consumer data without transparent communication of the value exchange potentially negates its value. Instead, companies need to ensure they provide consumers with the tools to understand and control how their data is used, and minimize mining any excess personal data.

When it comes to data privacy, there are two very different paths forward. Will your organization prioritize data privacy or treat it as an afterthought?