We live in an era of big data, in which today’s enterprises have access to more data and information about their customers, suppliers and partners than ever before. However, with every new opportunity comes new challenges. As a result, enterprises attempting to capture the innovation potential of big data will also need to analyze the risk/reward potential of big data. So how can today’s innovative enterprises rise up to the challenges of big data privacy?
The challenges of big data privacy
The upside to all that customer data, of course, is greater insight into how to become more profitable and more efficient. The downside, though, is that corporations are also exposed to data privacy and protection issues that would have been largely unthinkable just a decade ago.
At one time, it was much easier to put firewalls around the enterprise. Data within the enterprise stayed within the enterprise. But then came the mobile era, the movement to the cloud and the whole trend toward BYOD (bring your own device). Suddenly, it became much more difficult to lock down data within the enterprise when it wasn’t trapped within a hulking mainframe.
On top of that, corporate hackers have raised the risk profile of big data considerably. Almost on a weekly basis, we hear about corporations being hacked into and their data stolen. Customer information, leaked on the Internet, now poses a very real risk for corporations. In some cases, as in the healthcare industry, companies now face substantial legal and financial risk if patient data becomes publicly available.
Customers are also better informed and the rising awareness of how they are the ‘product’ has increased the scrutiny on companies getting innovative with what they can do with big data. Privacy regulators are pushing out new legislation aimed at reducing privacy risks and protecting personal data. Big data needs big privacy.
Data is the new oil for innovative enterprises
But there is no going back. The push is on to collect more data, and the proliferating number of online channels and platforms means that corporations are able to collect more information about their customers than ever before. They now know not only their demographic information (i.e. age, gender, geographic location), but also they psychographic information (i.e. their likes, behaviors and preferences). They can track how long they stay on a website, and where they go afterwards.
By employing sophisticated algorithms, enterprises can literally sift through an unimaginable amount of data to find the proverbial “needle in a haystack.” They can now work on building sophisticated prediction models that run on data. With new algorithms and AI-powered machine learning, the Holy Grail is the creation of the right offer, at the right time, to the right customer. The new advertising and marketing opportunities are almost endless.
No wonder some business analysts and venture capitalists have referred to data as “the new oil” of the digital economy. Data is what fuels the modern innovative enterprise. And all of today’s top innovation trends – artificial intelligence and machine learning, the Internet of Things and mobile – simply accelerate the push even further to collect and then analyze as much data as possible.
Today’s innovative enterprise needs data as much as the corporations of the 20th century needed fossil fuels. Data is what drives the modern enterprise. So with that in mind, how can the modern enterprise balance the risk and reward of big data?
Solutions for big data privacy
The easiest solution for big data privacy, of course, is to “harden the target.” Corporations are largely at risk because they do not make privacy and security a primary concern. They need to be thinking about ways to protect data information, such as by making sure that all customer data is encrypted so that, even if hackers get their hands on it, they won’t be able to use it.
Another solution for big data privacy is to make customers part of the ongoing data security effort. For example, even requiring customers to change their passwords on a regular basis can go a long way to making sure that hackers can’t get their hands on valuable information. Since financial services providers stand to lose potentially the most from any privacy hack, it’s no surprise that they have been hard at work devising solutions that prevent hackers from accessing the information in the first place.
The computer password might become a relic of the past, due to the increasing sophistication of hackers and the creation of new data security threats such as ransomware. Even data protection as simple as requiring a fingerprint authentication can go a long way to deterring hackers. And it’s also the reason why trying to log into your personal accounts can often lead you down a rabbit-hole of verification questions and CAPTCHA responses. Corporations want to make sure that you are who you say you are.
It’s also possible for corporations to make data privacy and protection part of their overall business strategy, as something that sets them apart from the competition. One way to signal this strategic change is by creating a specific role – the Chief Privacy Officer (CPO) – to ensure that best-in-class privacy and data protections are deployed throughout the corporation, and also that employees are well aware of how to protect themselves (and their customers) from data privacy risks. For Internet businesses, “trust” can become a new source of competitive differentiation.
Big data and new innovative business models
Going forward, one big trend that innovative enterprises will need to wrap their heads around is the exponential growth of the Internet of Things. According to the research firm Gartner, there are now more than 8 billion objects connected to the Internet of Things right now – and that number is going to continue to accelerate, posing new risks for big data privacy.
There’s obviously a tremendous amount of innovation potential when objects are hooked up to the Internet. Take the smart home, for example. It’s no longer in the realm of science fiction to talk about Internet-connected appliances or even Internet-connected furniture.
Or take the notion of the smart city, in which Internet-connected infrastructure can relay information on a real-time basis, helping cities change traffic patterns or repair infrastructure as needed much more efficiently than ever before. The innovation potential is still largely untapped.
But all of that interconnectivity – and all those devices talking to one another, trading data and information – also represents a mounting security risk. It’s no wonder that data privacy experts now warn about the Internet of Things, concerned that devices around the “smart home” could also be used to snoop on you and thereby transform into surveillance devices.
Next steps for big data privacy and innovation
Going forward, the challenge will be to protect user data and privacy, while at the same time, using all that protected data as part of innovative new business models. With the right data, innovative enterprises can create hyper-targeted advertising campaigns, improve the efficiency of just about any business process, and ensure that decision-makers have as much data at their fingertips as possible to make the best possible decision. The trick, though, will be to protect customer data in a way that won’t stop “the new oil” from coursing the enterprise on a real-time basis.