Data privacy is a growing concern for more consumers

Businesses place great value on the data they collect about their customers. Through this information, companies can send out targeted advertising, predict sales trends and improve their products. But consumers naturally see it differently. For a lot of people, data collection is an invasion of their privacy and a practice that can easily be abused, leading to mistrust and suspicion of many businesses.

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A report released Tuesday by KPMG looks at the growing concerns among consumers about data collection and offers advice for businesses on how to address those concerns. The report, named “Corporate Data Responsibility: Bridging the Trust Chasm,” is based on two online surveys conducted by KMPG in April and May 2021. The first survey elicited responses from 2,000 U.S. adults; the second from 250 decision-makers involved with security, privacy and data at companies with 1,000+ employees.

Despite the growing anxiety over data collection, the practice has actually been increasing. Over the past year, 70% of the companies analyzed by KPMG expanded their collection of personal consumer data. Some 75% of the business leaders polled said they’re comfortable with the level of data their company collects, and 95% claimed their company has strong or very strong data protection measures in place.

However, there are warning signs even at the businesses that do collect data. Among the business leaders surveyed, 62% felt that their companies should do more to protect customer data. A third of them said that consumers should be more concerned about how their data is used by their company, while 29% admitted that their company has sometimes used unethical means to collect private data.

On the consumer front, people are becoming even more skeptical and wary about their data being collected. A full 86% of the respondents said they feel a growing concern about data privacy, while 78% expressed fears about the amount of data being collected. Some 40% of the consumers surveyed don’t trust companies to use their data ethically, and 13% don’t even trust their own employers.

Consumers aren’t just fearful about the practice of collecting data, they’re worried about how their data may be compromised or sold to other parties. Some 47% of the respondents said they’re concerned about the possibility of their data being hacked, while 51% were worried about it being sold. Ironically, only 17% of the business leaders surveyed said their company sells data to others, a sign that businesses need to be more transparent about this practice to try to waylay consumer fears.

“This split between business and consumer sentiment isn’t new, but its persistence shows that businesses have a long way to go if they want to make the public more comfortable with how they are collecting, using and safeguarding data,” Orson Lucas, KPMG U.S. privacy services leader, said in the report. “Failure to bridge this divide could present a real risk of losing access to the valuable data and insights that drive growth.”

As fears over data collection grow, people are becoming less willing to share private information. Among the consumers surveyed, 30% said there are no circumstances under which they’d share data with businesses. Only 12% said they’d share data to make ads more relevant, while just 17% would do it to help companies improve their products and services.

Despite their anxiety, consumers are willing to share information in specific cases. Some 57% of the respondents said that the use of facial recognition technology in criminal investigations is acceptable, while 52% are comfortable with businesses using recorded calls for quality and training purposes.

With consumer concerns over data collection increasing, how can companies better manage their privacy policies and practices to avoid alienating their customers? KPMG offers a few suggestions.

Be more transparent about how consumer data will be used. Around three-quarters of the consumers polled said they want greater transparency about how their data is used, and 40% said they’d share data if they knew how it would be used and by whom. But only 53% of the business leaders surveyed said their company has actively tried to show how consumer data is used.

“The best data use disclosures are thorough, well-organized, and easy to understand,” Rob Fisher, U.S. KPMG Impact leader, said in the report. “They show consumers who is using their data and how, and draw a clear connection between the business use case and benefit to the consumer.”

Analyze your own business ethics when it comes to data collection. Many of the consumers surveyed said they don’t trust companies to do the right thing. As such, the onus is on businesses to show and prove that they can act ethically in this regard.

“While there is no standard definition of unethical consumer data use, it shouldn’t be terribly difficult to identify,” Martin Sokalski, principal in KPMG’s emerging technology risk practice, said in the report. “If companies would not want their data practices in the headlines—out of fear of what consumers might think—it makes sense to reconsider.”

Give consumers more control over their data. Most of the respondents said they want more control over their data. But only 59% of business leaders said their company gives customers control over how much data goes to whom, while only 52% allow people to opt out of sharing data. Just half of the companies let customers view the personal data that’s been collected about them, and less than half offer a website to explain their data collection practices.

Make data anonymous whenever possible. Almost half of the consumers surveyed said they’d be more comfortable with data collection if the information were made fully anonymous.

“Data anonymization techniques are becoming more sophisticated, and allow businesses to gain real market intelligence without compromising individual privacy,” Lucas said. “While this is not always realistic, it should be part of every company’s data toolkit.”

Take the lead in establishing corporate data responsibility. Some 49% of the consumers admitted that they don’t know how to protect their personal data. But 64% said that companies aren’t doing much to help. Most of the respondents said they want businesses to take the lead in implementing data responsibility and sharing details on how consumers can protect their own data.

“Our research has provided insights into how individuals want businesses to handle their personal data,” says Sokalski. “Companies that take the lead on this issue—by demonstrating that they are hearing what consumers are saying and taking meaningful action—will be positioned to reap the ongoing benefits of access to consumer data.”

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