MEF CEO Rimma Perelmuter explores the consumer trust regulatory paradigm in this excerpt from a guest chapter of the Global Legal Group (GLG)’s latest lnternational Comparative Legal Guide to Telecoms, Media & Internet Laws & Regulations in association with MEF. The whole guide is available to download now.
Fifteen years ago, mobile content and services extended to simple Java games and ringtones or as text-to-vote platforms that encouraged viewers to interact with their favourite reality TV shows. Very little, apart from the mobile number, was tracked or known about the consumers that used them.
The mass adoption of smartphones and faster mobile networks have of course changed the opportunity from those early days beyond all recognition.
The smartphone has become the key to our digital lives. And just as the mobile handset upped the ante on the quality of content, services and customer interactivity, it has now opened a fire hydrant of personal data that is captured by the companies that provide services in this new, data-driven era.
Understandably this makes consumers uncomfortable. Real-world concerns around the abuse of their personal data, data breaches and identity theft are increasingly defining how many people feel about using this new breed of services.
At the regulatory level, the EU’s General Data Protection Regulation (GDPR) expands the rights of EU citizens around privacy and protection of personal data. Among other things, it requires that all data processors – which is most companies – maintain adequate data records, disclose data breaches and increase opt-in and opt-out options. Heavy fines are on the table for companies found in breach.
In August 2017, the UK government issued a ‘statement of intent’ to strengthen its data privacy laws via a new Data Protection Bill. Like GDPR this will include the right to be forgotten, the right to require social media platforms to delete information when asked, and tighter regulation on default opt-out or pre-selected tick boxes.
In Europe and elsewhere, data holders are taking note and the principles of good stewardship around privacy, security and identity have been elevated to boardroom level issues. Consent, control and data portability are fundamental to mobile product and service design. Consumers must give permission before any data is collected. Data must be transferrable and it must be deleted or returned upon request.
In reality, GDPR and the new Data Protection Bill reflect the changing consumer attitudes and behaviours around data driven services and the rise of the ‘savvy consumer’ – a smartphone user that jealously guards her privacy and security, and is prepared to take action if a provider is seen as abusing that trust.
Concurrently, there is a growing awareness amongst savvy consumers that their data is valuable; an asset that needs to be treated with respect, or even as something that the use of, delivers a reciprocal benefit to them.
The Consumer Trust Opportunity
And whilst regulation is beginning to do an effective job in championing the rights of individuals, there is a commercial imperative to build consumer trust and value around how individuals engage with and are rewarded for sharing personal data.
As part of our Consumer Trust Initiative, MEF established a multi-stakeholder working group in 2011. The group is united by a commitment to building a trusted and profitable data-driven ecosystem, which rewards consumers and businesses alike. One that highlights consumers’ privacy, identity and security concerns whilst addressing how to drive good stewardship and innovation around data protection as a business imperative.
Under the guidance of the working group, MEF recently published its 4th annual Consumer Trust Study. The Study, supported by ForgeRock, Orange, and digi.me, surveyed 6,500 consumers in 10 markets and explored the attitudes and behaviours of smartphone users globally, providing detailed insights into consumer understanding and motivations around mobile content and services.
This year’s study aimed to help businesses understand consumers’ motivations and behaviours when it comes to privacy, identity and security and how their data is used. At the same time, we surveyed how consumers are reacting to some of the principles being introduced in GDPR.
The headlines statistics are hard-hitting. When asked why they do not use more apps and services, 40% named one or more trust issues as the most important factor. Privacy (16%) remains the most influential trust related concern, closely followed by security (15%).
The majority also do not ike sharing data and the number of people always happy to share personal information has dropped from 6% in 2016 to 3% in 2017. 39% are uncomfortable sharing personal data – and claim they never do, while a further 32% are ‘reluctant sharers’ – uncomfortable sharing data but aware they must if they want to use the app or service in question.
Savvy consumers are highly sensitive to trust issues and motivated to take action – both positive and negative. 86% have taken action as a result of trust concerns, e.g. warning friends and family of a suspicious app or service. By the same token, almost half (47%) would recommend a trustworthy app to friends and family. And when asked what makes an app or service trustworthy, 33% said a ‘clear, simple privacy statement’.
But rather than hitting an impasse, a diverse community of startups, personal data holders, privacy advocates, technologists and innovators are trialling new business models around a disruptive and powerful idea – The Personal Data Economy – which puts individuals in control of their personal information and allows them to share it with businesses, brands and other trusted third parties on their own terms.
Rimma Perelmuter recently appeared on a panel at Forgerock’s Identity Live 2017 titled the Evolving Role of Identity in Digital Transformation for discussion on these issues with Matt Grest, BBC, Dan Farrell, Accenture, and moderator David Birch. Watch now…
MEF is delighted to be hosting the Trust Advantage workshop as part of the upcoming Consumer Identity World Europe 2017 with Digi.me, Omidayar Network, Orange and The Trusted Executive Foundation – MEF Members get 20% off delegate tickets. Find out more..