Privacy is a Business Disrupter

Although there's obviously a significant interest in privacy from a legal and compliance perspective, Vodafone's head of privacy, Stephen Deadman, told the audience at the recent IAPP Summit that there's an increasing focus on economics.

Having attended many privacy conferences from his base in London, Deadman is seeing a shift in emphasis.

"Rather than being surrounded by people who have a legal background or a compliance background or a regulatory background, I'm surrounded by people who are entrepreneurs and strategists and business analysts," he said.

Their focus is on balancing the friction between privacy with the uses of personal data. While that was a recurring message during the summit, which was titled Privacy@Play, Deadman's experience from the EU suggests that a shift is taking place with new business models emerging models he says will "have a dramatic impact on the business and privacy landscape".

This broadening view of privacy is being reflected, Deadman says, through an emergence in art focussed on highlighting government surveillance as well privacy breaches against celebrities.

Deadman was involved in a survey and discussion with a number of influential parties in the EU who looked at the issues of privacy. Because of the increased focus through the art and media, and as a result of breaches that had made front-page news, many of the stakeholders from business, the arts and media believe they have a new privacy obligation.

"Many stakeholders see their role to increasingly look out for the interests of consumers who they perceive as having their ignorance and apathy taken advantage of by companies," said Deadman.

However, Deadman also noted that consumers are developing a more sophisticated view of privacy. He highlighted the recent issue U2 faced when, through an agreement with Apple, all iTunes users had the new album automatically added to their libraries.

"Consumers are starting to extend concepts from their physical world onto the digital space'" he said.

This is based up by research from the US where as many as 80% of people are concerned about the amount of government monitoring of communications. This is leading to a loss of confidence in some communications means.

A further outcome is that consumers are now looking for parties that will look after their interests, as they perceive there's a vacuum of support for consumer rights to privacy.

Breaking from the past

Deadman pointed out that many of the assumptions in data management policies were founded during times when the storage and processing capabilities of today were not considered. For example, the cost of data storage per gigabyte has plummeted from hundreds of thousands of dollars to just a few cents in a very short time. The availability of computers and the Internet means that consumers now have the tools to manage their own personal data.

Many of the underlying principles in data privacy frameworks was based on the assumption that companies would control and manage data because it was not conceived that consumers could do it themselves.

Whereas the past was constrained by the scarcity of data, today's world is in the reverse position. And the huge amounts of data now collected is a valuable asset that can drive new ways of doing business in the digital economy.

"In 2010 the World Economic Forum declared personal data as a new asset class. The value of the Internet of Things is not likely to be in the things. It's going to be turning a product business into a service business through data and analytics," said Deadman.

"Personal data is too important to leave to back office compliance functions," Deadman said. "It must be a front office differentiator for the customer experience".

Read more: G20 targeted as malware authors hone in on Tibet activists

Disruption is Inevitable

For this to happen, companies need to do a better job with transparency in order to find a balance that is acceptable to consumers that delivers value to everyone in the value chain.

This will require a disruptive shift where businesses take a customer-centric view rather than starting with the organisation. Deadman noted that most of the data collected by businesses is used to drive and refine business processes such as marketing.

We have reached an inflection point according to Deadman. Consumers now have the tools, awareness and capability to exert greater control over their personal data Analytics tools, storage and processing capability are now in their reach. As a result, they have more power than before.

Deadman likened this to the Arab Spring protests in the Middle East where people, who had long been powerless, discovered that they had new tools and power as a result of changes in the world. This lead to them exerting their new-found power.

Many new services are emerging that give consumers the ability to manage their personal data across many different networks and to control how it is distributed and used. This includes browsers such as TOR but extends to tools such as SocialSafe and miiCard.

"The individual is going to become the point of integration of personal data about themselves," he said.

As individuals control more and more of their own data the value chain will change. The pest person to keep your personal data up to date is you according to Deadman. That means an economic shift will take place. Personally curated data will have a higher market value.

From a regulatory point of view, Deadman wants to see a regime established where privacy commissions and regulators are less focussed on enforcement of privacy and create an environment that promotes innovation so that consumer privacy is a point of innovation and delivers better outcomes through a "carrot" approach rather than a "stick".

This article is brought to you by Enex TestLab, content directors for CSO Australia.

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