Mark Street
Mark Street

Is privacy the enemy of progress?

How can firms balance the conflicting demands of respecting privacy and studying customer behaviour to develop better products?

Mark Street

Data privacy is always grabbing the headlines these days, thanks to the sterling work of the government's information commissioner. As consumers, it is fair to say that we now all have a much keener sense of what organisations are permitted to know about us.

So what would you say if there were a system so pervasive it knew absolutely everything about you? If it knew when you bought a cup of coffee, how much you paid on your mortgage, how much you spent on your kids' school fees, and where you enjoyed shopping?

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This is not the stuff of some Orwellian nightmare, but something much more prosaic. Under the consumer credit system, banks can share our personal financial data so that they all have a bird's eye view of who they can and cannot trust to pay their bills.

In the current climate, the exploitation of such intimate financial details would be enough to make most respectable individuals shudder with fear.

But as consumers, we cheerily sign away our privacy rights every time we sign up with a credit card provider.

In many ways, privacy is the enemy of big business. It should be the goal of every large corporation or organisation to find out as much about their customers as they can, to help satisfy their customers' needs. That is the basis of any customer relationship management system, which attempts to learn and retain as much data about the consumer as possible.

Companies should try to encourage customers to waive rights to privacy as often as they can. That way, firms can get the information they need without breaching the Data Protection Act. If a consumer agrees to tell a company everything about themselves, then how can the commissioner take action against it?

A good example of this is the way that supermarkets have encouraged the use of customer loyalty cards. In return for discounts, customers are willing to waive their rights to privacy and allow the supermarkets to maintain an electronic record of what they buy and when they buy it.

Another example is the growing use of location-based technology, where consumers give away their personal mobile numbers to ensure that they are alerted to bargains as soon as they pass a shop that is participating in promotional schemes.

As a consumer, I'm happy when I receive an email from a web site that has assessed my past purchases and is sending me similar deals for my perusal. Is it an invasion of privacy when your friendly local store keeper asks after the wife and kids and lets you know that there is a special deal on family packs of toothpaste this week? You'd hardly punch him in the face for invading your personal space, would you?

But as Oracle chief executive Larry Ellison pointed out at the recent OracleApps world event in San Diego, it is not easy in some areas to gain people's permission to share their personal information for the common good.

It is particularly problematic in the health sector where patient records are subject to a lot of privacy regulations. But as patients, surely we would consent to make our records available to other systems as long as it was in our own interests and allowed doctors to make a better diagnosis?

The technology to offer consumers a better service exists. It is now a question of ensuring that the right marketing strategies are put in place to exploit personal information to benefit both the enterprise and the consumer.

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Further reading

Data Protection Act

Data Protection Act

How the Data Protection Act affects the way firms can process information and monitor their staff

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