Data misuse and breaches seem increasingly commonplace. Just look at the recent Facebook and Cambridge Analytica data furore where raw personal data has been passed to a third party for unexpected uses. This breach has badly damaged consumer confidence in how their data is held and managed by organisations.
And this follows the Equifax data breach in 2017, when one of the world's largest consumer credit reporting agencies – managing a huge database – was hacked, exposing the personal data of up to 143 million people, including names, birth dates and credit card details. It is no wonder governments and consumers alike are demanding change.
GDPR possibly once seen as a compliance-only exercise is now affecting the very way companies value their data asset - both appreciating its value but also the risk of getting it wrong. Not just because of possible fines but in fear of consumer backlash as the #DeleteFacebook campaign has shown.
Centralised datasets are an issue
The trend for pooling datasets, where data is combined with another set to be used by one or many companies, has become an increasingly popular way to enhance consumer understanding and find lookalike customers.
However, this approach requires each of the participants to trust that none of the other parties will misuse their customer's personal information and creates a risk that they may share with a company not overtly agreed to by their customers. Also, such datasets become a magnet for hackers keen to get their hands on the wealth of data they hold. So, no matter how tight their security, they will always be vulnerable.
It's no wonder that 61 percent of consumers in InfoSum's recent ‘Exploring Data' research stated that they worry about their data being stolen, and only 12 percent of respondents said they feel that their data is more secure now than it was a year ago.
This is backed up by research from BCG, which reveals that 79 percent of consumers say they would be unlikely to share or let data about them be used by a company they did not trust.
The answer is the decentralisation of data
By analysing decentralised datasets it's possible for businesses to securely share data and generate insight from one or multiple data sources.
The technology behind this approach is ushering in a new era of safe data collaboration and knowledge sharing, because rather than the information being moved into one pot, a decentralised network builds virtual bridges between datasets. Therefore, each company retains complete ownership and control of their data – removing the risks that traditionally come from sharing it.
This privacy-by-design technology keeps datasets isolated, encrypted and anonymised, so analytics can take place while meeting GDPR requirements. With this technology it's possible for each party to set its own access controls, enabling those involved to govern who has access to their data, down to specific parts of their database. If necessary, access to certain data can be terminated immediately.
And unlike Blockchain - another decentralised solution - access to the raw data is only given to the data controller, with only one record of truth being held. The only thing passing between companies is statistical information - creating the insight without the risk
Syndicated decentralised datasets
Organisations have historically come together in various sectors to meet their goals, for example credit scoring in finance, research in the health sector, etc. Despite the risks, sharing sensitive data or allowing access to competitors has occurred.
However, by joining a syndicate that uses decentralised technology, organisations will be able to share insight widely and securely with many other businesses that help them to gain considerable knowledge on their customer base, such as their lifestyle and wider purchase data. This will help new product development and drive deeper relationships with customers – delivering extra revenue for businesses. In fact, this approach makes it possible for the smallest of organisations to have access to the breadth and depth of customer insight usually restricted to the big tech giants.
At the very time when companies are having to balance innovation driven through customer knowledge and data sharing with the increasing need for security and compliance; decentralised technology provides a much-needed answer.
Contributed by Nicola Walker, Chief Commercial Officer at InfoSum.
*Note: The views expressed in this blog are those of the author and do not necessarily reflect the views of SC Media UK or Haymarket Media.