Building privacy-first consumer experiences

Ever clicked on the "Why am I seeing this ad?" button after seeing an irrelevant advertisement, only to find a vague explanation without any clear opt-out mechanism? This is just one example of the negative experiences online customers face on a regular basis thanks to current data collection practices.

Data has become a crucial asset for businesses of all sizes, as it enables personalisation and enhanced customer experiences. But when there is a lack of transparency and consent, it inevitably leads to a loss of brand trust and loyalty.

Consumer trust at an all-time low

Privacy and security are the biggest culprits stopping consumers from signing up or registering for online applications.

Customers today are more cautious than ever about sharing their data, even showing a willingness to abandon sign-ups if they are unsure how their data will be used. According to a report, 87 per cent of customers stated that they ceased signing up for one to three out of 10 apps because of excessive hassle or perceived lack of trustworthiness.

Additionally, around 30 per cent of customers are worried about their personal information being shared across multiple companies.

The challenges of traditional data collection

Conventional data collection practices hurt customers and businesses alike.

Glenn Gore, CEO of Affinidi, a technology firm offering data and identity management solutions, explains, “The all-or-nothing nature of current consent management is highly problematic. You either give consent to everything without having transparency, or you don’t give consent and miss out on that extra level of personalisation. There’s a lot of room for improvement. You should be able to give consent at an attribute level, where you can share specific data depending on how much you trust the brand.”

Organisations also face challenges. Firstly, they might be buying third-party datasets that actually misrepresent consumers, leading to inaccurate advertising and marketing campaigns. Gore adds, “You’re lucky if you get two to three per cent conversion rates. There are not many services out there that can have a 97 per cent failure rate and still be seen as successful. That’s a glaring gap.”

Secondly, if organisations get the data usage badly wrong, it breaks consumer trust by revealing they know more about individuals than they should. This is a major violation of privacy that is extremely difficult for brands to recover from. 

Moreover, with strengthening privacy regulations across the globe, businesses face compliance risks. Most businesses have not built their identity and data management systems with foresight into these new rules.

“They struggle to answer basic questions such as what customer data do we hold? Do we have proper consent to use it? How is the data being utilised and shared? These are all questions that organisations should be asking themselves,” says Gore.

Then there’s the constant challenge of data breaches, exposing these shortcomings regularly. Some companies have been found holding and misusing more customer data than permitted. Alarmingly, data from former customers who should no longer be in the system is also frequently leaked.

Since there’s an ever-growing concern among consumers about how their personal information is being gathered, stored, and monetised without consent, prioritising transparency and individual privacy is no longer a choice, but a prerequisite for business success.

Zero-party data as a game changer

Despite the concerns about data privacy, there’s still willingness among customers to share personal data with companies they trust. That’s where zero-party data comes in, presenting a radical solution to these issues in data privacy and personalisation.

Zero-party data refers to information that customers intentionally and proactively share about themselves – their preferences, consent and interests – after being made fully aware of how it will be used. By putting users in complete control, it fosters transparency and helps rebuild trust.

The key to obtaining zero-party data is creating a value exchange that incentivises customers, such as personalised experiences, loyalty rewards or exclusive discounts. This creates a two-way relationship where customers willingly share data with trusted brands in exchange for richer interactions, creating a win-win scenario for both parties.

Gore provides a personal example: “If I share with Nike that I’m a beginner runner, wearing a men’s size 10 shoe and training for a marathon, the website could show me personalised shoe recommendations instead of their entire product range. Further sharing my running goals and stats could enable Nike to gamify the experience, offer me incentives and suggest shoe upgrades based on my actual usage data.”

Transform customer interactions with holistic identity management

Companies must build trust by empowering customers with control over their data. This means allowing them to choose what information to share and specifying who can access it. This can be achieved through holistic identity management.

A holistic identity management solution not only allows companies to effectively collect and analyse customer data while adhering to security and privacy regulations, but it also empowers customers with the ability to manage their data in a manner to which they consent, and have a clear understanding of the benefits they receive in exchange for data sharing. This approach also promotes data minimisation, ensuring that only necessary data is shared and not excessive personal details.

This ultimately builds a foundation of transparency, trust, and consent.

The Affinidi Trust Network (ATN), a suite of products developed by Affinidi, embodies a vision for a future where data from multiple authoritative sources can be integrated seamlessly, the integrity of data custody is ensured and individuals have the power to consent to data sharing while verifying the identities of all parties involved. ATN’s goal is to establish end-to-end trust in data transactions, fostering privacy-first customer experiences.

Affinidi is a technology company dedicated to empowering individuals with rightful data ownership. It envisions a world where everyone can effortlessly and securely control, manage and extract value from their data.

Learn more about Affinidi here.