Two-thirds (66%) of European consumers do not know who has access to their personal data and how it’s used. Yet, the majority still have an appetite for digital advancement, with 58% believing that technology can contribute to the digital progress of their country by creating new jobs and livelihoods, and 68% wanting investment in technological innovation to make our world a better place – compared to the 6%, for example, who want it to commercialise things like space tourism.
This clear gap between the digital appetite of consumers and their confidence in how their data is used to create such services and experiences could undermine technology’s potential to improve our economies, society and planet, reveals a new study of over 6,000 consumers across Europe by VMware.
While 47% of people acknowledge the introduction of new technologies that push new frontiers can be uncomfortable/scary, they still believe it is necessary to improving the well-being of citizens and society – just 16% do not.
Yet the research findings also reveal the significant steps government and industry need to take to ensure consumers are fully onboard with their role in sharing data to drive the possibilities of a digital-first world. The majority (58%) of the public are increasingly concerned about the security of their online digital footprints and almost three-quarters (72%) are worried about the role technology plays in the spread of misinformation, while 48% now feel paranoid that organisations are tracking and recording what they do on devices. On top of this, just 10% of consumers feel businesses and governments are clear enough on the technologies they use and how they use them.
“We’ve reached a decisive moment in how technology innovation and digital experiences can positively shape our lives, economies, society and planet,” said Joe Baguley, VP & CTO EMEA, VMware. “But there is a lack of awareness about the type of data needed to drive this progress and consumers are rightly feeling mistrustful. Most people’s only real understanding of data is when a security breach story hits the headlines – and not all the incredible things we can do in medicine, with autonomous vehicles, in mobile entertainment, shopping and society. Right now, the perceived price of progress is too high – consumers are not yet fully on-board with sharing the data required to fuel change. For consumers to embrace this, they must know what happens to their data – the majority of which isn’t personally identifiable to them – and feel confident it is being handled securely and sensitively.”
As is stands, mistrust of data has reached a point where it’s impeding support for technology’s potential to act as a force for good. Over half (60%) of consumers are scared or uncomfortable sharing their personal day-to-day data to help governments and companies design smarter and greener infrastructure. And less than a fifth (17%) are excited at the prospect of a digital shadow of the town/city they live in that could improve the efficiency of their physical surroundings.
“According to the European Commission, unlocking the value of data could be worth €550 billion to the EU by 2025,” continued Baguley. “But we in the industry and government must take an active role in helping consumers become more aware and confident about data, so we can collectively help boost digital economies.”
Intelligent CIO Europe spoke to industry experts about how could ‘data mistrust’ in Europe compromises technology-driven change and how organisations should manage this accordingly…
Yaniv Balmas, VP of Research, Salt Security
By adopting emerging technologies, companies can deliver compelling new services that increase revenue opportunities and strengthen the business. In today’s technology landscape, digitalisation has emerged as the most prominent opportunity. Digitalisation has generated a seemingly endless array of new online services from on-demand food delivery to 24-hour retail services to instant mobile payment applications. The COVID pandemic further accelerated growth of these services.
However, without the ability to ensure the safety and security of the services and the sensitive data being used, organisations place this opportunity at risk. ‘Data mistrust’ presents a huge danger for these technology-driven digitalisation initiatives by:
- Slowing speed to market for innovation
- Hindering an organisation’s competitive advantage
- Damaging brand reputation
Slowing speed to market
Data insecurity always tops the list of obstacles to speed to market. Without the ability to ensure data security, organisations slow down the deployment of new digital initiatives and lose their speed-to-market advantage.
As an example, look at open banking. In Europe, open banking increases competition across financial services institutions and promises consumers more convenience and choice. However, for open banking to ultimately succeed, customers must trust the security of their financial data. Any organisation offering open banking services must be able to defend against threats, or they won’t be able to quickly rollout these services.
Losing the competitive advantage
By slowing the deployment of these new initiatives, businesses also hurt their competitive advantage. Technology transformation represents a key competitive advantage. If organisations can’t ensure data security, they fall behind other organisations that can – hindering their ability to compete, losing to the competition and putting profits at risk.
Damaging brand reputation
Nothing hurts a company’s reputation more than a data breach. When an organisation’s brand reputation becomes damaged, the impact can be long and difficult to overcome. Whereas a positive company brand spurs consumer trust and loyalty, a poor brand reputation results in distrust and can ultimately cause customer churn.
Organisations must manage security threats proactively
Companies must be proactive with security processes to keep technology-driven change moving forward. With its reliance on Application Programming Interfaces (APIs), digitalisation has expanded the attack surface. All online applications, including open banking applications, have been built on APIs and many enterprise companies have already experienced API incidents.
To ensure speed to market, competitive advantage and brand reputation, organisations must protect these critical assets across development, deployment and production. Maximising the value of their digital technology-driven initiatives depends on it.
Amy O’Connor, Chief Data and Information Officer, Precisely
Data is at the heart of any technology-driven change or strategic decision made by an organisation. However, a key challenge for businesses when it comes to data is one of trust. In fact, new research from IDC shows that while 63% of data practitioners believe they are expected to make data-driven decisions, only 27% completely trust the data they are working with. This illustrates an urgent need for businesses to bridge a data trust gap between the expectations placed on the use of data and the ability to trust that data to make confident decisions. For example, businesses that want to incorporate Artificial Intelligence (AI) or automation in their business operations need to be able to trust their data in order to ensure successful outcomes. After all, AI is only as good as the data it’s fuelled by.
For global institutions, there is also the added pressure of worldwide regulations which demand an understanding of where the data has been gathered as well as being able to prove its accuracy, validity and security. What complicates this is that regulations are constantly evolving. And while those regulations often cover data privacy, ensuring customer data is protected against inappropriate use is of utmost importance for any business that expects to build and maintain excellent relationships with their customers. It’s all about trust. It is therefore vital that organisations proactively maintain data quality and security to comply with the latest data governance standards.
The ability to trust data is paramount, but for data to be trustworthy, it needs to have integrity. Businesses must develop a foundation comprising the core pillars of data integrity: data integration; data quality and governance; location intelligence; and data enrichment. By doing so, businesses will be better prepared to manage risks, provide better customer experience, reduce costs and move faster due to confident decision-making.
Many enterprises have established a basic foundation for data-driven decision-making and automation, but they are also still reporting significant struggles in the quest to develop and maintain data integrity at scale. The challenge of achieving trustworthy data at scale will only increase in importance in the years to come as businesses continue to rely on AI, Machine Learning (ML) and other advanced analytics to inform strategic and tactical decisions. There is a way to go before many business leaders can say that they truly trust their data, but data executives should start by preparing to build a sound data integrity strategy to lay the foundations for success.
David Friend, Co-founder and CEO of Wasabi Technologies
Data mistrust has been a growing phenomenon for years and governments have reacted accordingly. Whether through GDPR, the EU’s Digital Markets Act or the upcoming Digital Services Act, we are seeing a growing legislative focus on data collection and usage.
Typically, the chief concerns around data (and data mistrust) in Europe are centred around anti-competition and big tech, privacy and data sovereignty.
Honing in on the latter, data sovereignty is the principle that individual countries can regulate the storage of data within their borders. This will enable more stringent security and privacy practices and will offer more transparency over how data is collected and handled by organisations in order to combat data mistrust.
In practice, data sovereignty legislation will also mean that organisations will struggle to store data internationally or collect data from international clients. This will add a new dimension to cloud storage, as organisations will need to secure individual user permissions to process any data outside the country where the data was initially collected. Given that this will be difficult or impossible to do, companies will be forced to look at more local cloud storage options.
Local cloud storage, in turn, will inevitably be more expensive for most European businesses. Forcing data storage into local centres will require storage providers to build more local centres. This comes with several up-front and long-term costs.
Not only will the construction fees affect storage providers, but they will also lose other financial advantages that currently help keep spending down. Having one big data centre is less expensive than having several small ones, especially if that one big data centre is in a location with cheap power and accessible cooling.
However, sovereignty laws mean that providers will have to front the construction cost of building local centres and they’ll also need to account for the long-term financial drain caused by new overheads like more expensive power and cooling. That’s not to mention the need to pay more workers to operate these data centres, along with things like dealing with the local regulatory environment.
For many providers who do not have the cash reserves of the hyperscalers to use as a cushion, this will likely mean pushing these additional costs onto their customers. Economically, this will make significant waves for both businesses and consumers.
Currently, cloud storage is taking over the corporate world. Year on year we are seeing the amount of data stored in the cloud grow exponentially and much of this growth is driven by business data storage. While data mistrust is an important phenomenon that is worthy of legislative attention, legislative attention comes with a financial cost that must be prepped for and managed accordingly.
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