INSIGHT

Data-driven business: benefits over backlash

Five steps to a fit-for-purpose data strategy for general counsel

Recent data scandals and the consumer backlash against privacy intrusions call for data strategies built on three pillars: governance, ethical decision making and consumer transparency and control.

Our research shows many organisations are still at the beginning of this journey. For example, almost half of ASX 200 privacy policies have not been updated in the past two years.

Legal counsel are uniquely placed to inform data strategy. They should advocate to senior leadership across multiple business functions for robust, holistic data governance for your organisation. And they can also help develop new trust compacts with consumers by raising the bar on transparency and consumer control over data. Here’s how:

1. Create consensus on principles for good data governance

An agreed set of data management principles is crucial

Where an organisation's philosophy on data use is unclear, in-house legal teams are unable to collaborate swiftly with operational teams to enable opportunities and mitigate risk. This perpetuates a loop of general confusion, inefficiency and reluctance to seek input from legal.

2. Be transparent to protect against risk

Develop a comprehensive map of data use cases at your organisation (both current and future), and ensure these uses are made clear to customers in a simple and engaging manner

A focus on mere compliance with privacy laws and the adoption of broad‑based consents and generalised privacy policy disclosures runs the risk of leaving consumers disinterested or, worse, alienated. It should be immediately obvious to your customers what they are signing up for – how their data is collected, how it is used, when it might be shared with third parties, how it might be commercialised, how it is protected and when it will be retired. Provided data is being used ethically and securely, removing the knowledge gap between perceived and intended use will help to protect customer loyalty and safeguard against critical reputation issues.

3. Empower your organisation to communicate value to consumers

Clearly communicate to consumers the benefits of sharing data

Meaningful communication of the value transaction taking place when data is shared is an essential counterweight for transparency. Consumers need to know how their data will be used, but also what they'll get in return. 41% of Australian consumers are comfortable allowing a trusted brand to transfer their information to third parties if there are clear benefits to doing so.

4. Banish 'set and forget'

Regularly updating your organisation's policy and practices is important, but frequently forgotten

Our research found almost half of ASX 200 privacy policies have not been updated in the past two years. In fact, approximately 20% of ASX 200 companies have not updated their privacy policies since 2014, when the most recent overhaul of privacy legislation took place. 4% don’t have a publicly available privacy policy at all.

5. Protect your assets

Data strategy is worthless without best practice cybersecurity

As organisations continually find new and more innovative ways of working with data, cyber criminals are finding more sophisticated ways to access it. As the crown jewels of your organisation, the value of your data extends beyond your borders.

Put simply, there's no point investing in data if it's not secure. Your data will be worthless if it is already accessible in the market. More importantly, the erosion of trust with your customer base in the event of a breach could be fatal.

Data-driven business benefits infographic