New research conducted by Future Foundation titled Data privacy: What the consumer really thinks reveals attitudes towards data privacy. The study, published by the Direct Marketing Association (DMA) surveyed 1,020 UK adults.
- 80% accept the disclosure of personal information has become ‘a part of life.’
- one in three regard their personal information as a commodity to be traded with companies in exchange for free services or better benefits.
- 58% said trust was the key factor when deciding whether to share their information.
- Only 32% said the offer of price discounts would be a sufficient incentive.
- 85% would prefer to retain control of their information and exchange it for benefits or services when it suited them.
The “Information Transaction”
The study shows that consumers are willing to share personal information but they don’t consider it something they should give away for free. They will provide it in exchange for trust. Brands can build trust by being transparent and allowing consumers to have control over how and when their data was being used.
Chris Combemale, chief executive of the DMA, said companies that fail to grasp contemporary consumer attitudes towards data privacy will lose out to more data savvy competitors:
Online platform owners and brands that market digitally must understand the current range of consumer views on data privacy. Insight into what they regard as private, what information they’re willing to exchange and under what circumstances should underpin their marketing strategies. The balance of power is now tilted towards consumers. They alone have the ability to choose who they share their information with, so it’s down to brands to give them a compelling reason to do so.
This piece of DMA research highlights that unless brands are trusted, provide people with the opportunity to control how their data is used and suitably reward consumers for sharing it then they will be left behind in the digital economy.
3 Types of Consumers
The DMA’s the findings showed that attitudes within the population have remained largely constant over fifteen years. A segmentation of the data shows three types of consumers who are positive or accepting of the principle data exchange:
- 53%: Pragmatists (happy to exchange data for specific consumer benefits).
- 31%: Unconcerned (express no worries about providing data to organisations).
- 16% Fundamentalists (opposed to data sharing unless there is a good reason).
Overall, despite the enormous increase in data exchange in the intervening period, the consumer privacy segmentation shows no evidence of a significant negative shift in consumer attitudes. Fundamentalists are attitudinally more concerned about keeping their information private and less positive about the idea of providing data in exchange for offers and service. Despite this, and their greater age, they still actively participate in the data economy at a slightly lower level.
Applications to Financial Services
The findings are roughly consistent with research from McCann Worldgroup released in October 2011 called “The Truth About Privacy.” About seven in 10 (71%) of global consumers are willing to share their personal shopping data with brands online.
Transparency: Close to six in 10 (57%) of US respondents say it is important to know exactly how their data is going to be used, selecting this as one of their to 3 important criteria when deciding to trust a brand. Closely following is a commitment from companies that they won’t pass personal data (ie. their telephone numberor email address), chosen by 56% of US respondents as a critically important criterion. 55% of US consumers want control over which data will be shared, while 30% want to know how they will benefit.
Sensitivity About Sharing Financial Information: However, this study indicates that consumers are more sensitive about sharing financial information online 5 times as many consumers will share their shopping data than will share their financial data online (14%). According to McCann insight, this reflects the sensitivity of financial information to a consumer’s sense of security. Roughly double the number of consumers (27%) will share medical data than will share financial data, while almost triple (39%) will share personal data.
Financial Institutions Most Trusted
Still, the McCann study shows that, globally, banks and credit companies are the most trusted to look after personal data and use it wisely. Medical companies are the next most trusted, followed by pharmaceutical companies and health insurance companies. Consumers show the least amount of trust in beauty companies and dating websites:
- 69% trust banks with their information (65% of US respondents).
- 57% trust credit companies with their data (46% of US respondents).
Snap! principle of personal data exchange:
Personal data in exchange for trust. Businesses need to ensure their consumers trust them if they want to obtain their data.