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Consumers have a hard time trusting businesses with their data—here are three ways to help change that

Published July 13, 2021

When it comes to sharing their private data, trust is priority number one

Thanks to the growing risk of data leaks and cyber fraud, consumers are paying more attention to their data. In this Norton study, 92 percent of global online users expressed at least one significant concern about data privacy.

Users are paying more attention to the risks of sharing their data because of documentaries like The Great Hack. And companies like Apple are offering users more control over their data, as seen with Apple’s recent update.

These developments have significant implications for business owners. New laws and changing consumer relationships with data can impact marketing and sales efforts. 

What is data ethics and why does it matter?

According to Cognizant data ethics is “a branch of ethics that evaluates data practices—collecting, generating, analyzing and disseminating data, both structured and unstructured—that have the potential to adversely impact people and society. It includes addressing and recommending concepts of right and wrong conduct, with transparency in and defensibility of actions and decisions driven by automated/artificial intelligence (AI) in relation to data in general and personal data in particular.”

Data ethics is important because there must be universal guiding principles for businesses to determine what should and should not be done with customer data. Also, while consumers have been more willing to share their private information during the pandemic, in 2019 there were signs indicating that they were growing weary of it. And now they’re raising concerns about what the consequences may be for potentially oversharing during COVID-19.

So businesses need to take seriously and understand the concerns consumers have about data and reassure them that they’re committed to customer privacy. Implementing data ethics can help business owners in any industry reassure their customers and adjust to any of their growing concerns. 

3 ways to implement data ethics into your business model

Business owners need to adopt data ethics in order to gain and retain consumer trust. Without it, you’ll have a hard time understanding your customer because they’ve blocked your access to their data.

Consider this fact taken from a recent survey of U.S. and U.K. smartphone users: only 21 percent say they “trust global brands to keep their data safe and secure.” At the same time, 64 percent said they’re at least somewhat willing to share personal data to get better services.

So the key is demonstrating trust at every turn guided by data ethics which you can implement with the following three principles.

#1 Bottom line: Private customer data and identity should remain private


If data has been collected from a person with their explicit approval, that’s fine. But customer data that exposes personal information and identity should be protected and never sold to other businesses.

Early on, implement business policies that address how you’ll use company data internally—policies like not selling data to third parties, not sharing customer communications publicly, providing customers with the data you have on them if they ask, etc. These simple gestures can improve the trust customers have in your business.

Train new and existing employees to respect customer data. The pandemic forced many non-digital businesses to shift to online operations overnight, and many of these companies didn’t have remote work policies and procedures in place for managing sensitive data outside the office.

In light of regulations like the CCPA, California’s data privacy act, or the EU’s General Data Protection Regulation (GDPR), businesses have understandably struggled to protect consumer data as reliably as they used to. But, implementing frameworks for data governance can help business owners adapt to online operations and build customer trust.

#2 Data usage should be transparent for customers

In addition to owning their personal information, customers have a right to know how you plan to collect, store and use their data. If you do intend to use customer data for any reason other than having a knowledge database, make that clear to your customers. 

Withholding or lying about your company’s methods or intentions is deceptive—and it’s unlawful and unfair to your customers. Customers won’t take deception lightly, either. A McKinsey survey found that 71 percent of people would stop “engaging with a company if it gave away sensitive data without permission.”

Along with clarifying how you intend to use their data, you also need to give customers the option to opt out. Here’s a great guide on crafting the messaging for data usage preferences. Don’t relegate your opt-out messaging to the bottom of your email. Make it clear that the customer has a choice in the matter up front.

Don’t use complicated legalese to confuse users at the point of data collection, either. Craft a simple and easy-to-understand privacy policy. It should be law-abiding and easy for the customer to understand what they’re consenting to when giving you their data.

Related: Google Privacy Sandbox: How Chrome’s ongoing updates will transform online advertising for businesses and users

For instance, you decide to collect customer data based on how they interact with your website to offer a more personalized experience. You should write a policy explaining this to your customers. Communicate what customers should expect from your company—if you’ll be tracking user behavior or sending personalized emails based on their buying habits. It’s the customer’s right to have access to this information, so they can decide whether or not they want in on the new experience.

#3 Always use humans to support AI-powered systems

One of the most complex and controversial issues regarding data ethics is how data use can create unfair biases. While human beings can also be biased when applying data, they generally have the ability to understand what’s inappropriate, offensive and/or discriminatory.

Machine learning and artificial intelligence aren’t able to pick up on bias without human intervention. Artificial intelligence can learn unconscious biases if fed inappropriate samples or if it’s not programmed with a diverse group of people in mind. Because of this risk of error on the part of machines and AI, data should always be supported by human checks. 

Take the failed Australian app Giggles. In 2020, Giggles, a social networking app, was announced as a platform for girls to chat in small groups. The app relied on gender verification AI software to ensure that only girls were able to join. But, it wasn’t well-received for many reasons, a primary one being that it automatically excluded many transgendered girls. Data should never be used as the only method for understanding who your customers are or for segmenting them, as that can backfire very quickly.

Related: Humanizing digital banking through conversational AI

Reassure customers of your dedication to keeping their data secure

Embed data ethics into how you operate your business. By clearly letting them know that their data will be kept private, being transparent about all the ways you intend to use it and taking any bias out of the equation, you’ll more easily gain their trust. And if they trust you, they’re more likely to provide your business with the data you need to improve your targeted marketing. Gain that trust!

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