How data ethics compliance improves business results | Media Pyro

The modern world is driven by data. Every industry recognizes the potential of data analytics to improve business performance, from informing customers to restructuring internal processes. However, with this powerful tool, each organization is responsible not only for using data to their advantage, but also for using it in a way that is ethical for all parties involved.

I recently sat down with Felix Van de Mael, co-founder and CEO of data analytics company Collibra, to discuss his thoughts on how companies can use data ethically and how it ultimately benefits businesses. Collibra’s Data Intelligence Cloud solution provides flexible management, consistent quality and built-in privacy for all types of data.

Gary Drenick: What does the term “data ethics” mean? Why is this important when it comes to protecting consumer data? What are the basics of proper ethical data management?

Felix Van de Maele: Today, data is the lifeblood of our global economy. The vast amount of data available in every industry opens up enormous opportunities and benefits. Organizations know that the ability to use data-driven information strategically is critical to future success.

However, it can be said that data does not have a voice of its own. Instead, the people and organizations using the data determine what voice the data will have – how it will be used to make decisions and whether or not it will be used ethically. These decisions can have long-lasting consequences for companies and individuals, and whether these end results are positive or negative depends on the moral decisions made by those using the data. This is a huge responsibility.

At the heart of data ethics, an ethical organization is one that seeks to use data to benefit others and avoid harm. If you’re already actively thinking about how your company implements data ethics, you’re well on your way to developing a framework for thoughtful and responsible data use.

Drenik: How does data mishandling affect/harm consumers? How can poor data management affect your company’s reputation and profits?

Van de Maele: While there are privacy regulations such as GDPR and CCPA, the US does not have data privacy and regulations at the federal level. This is worrisome given that some companies have large amounts of consumer data at their disposal. Typically, personal data is used to develop highly targeted advertising and personalized experiences on social platforms, but it is difficult to enforce standardized safeguards without regulations to ensure that companies use consumer data ethically.

Mishandling data can harm consumers, often through data leaks, leaving customer data vulnerable to attackers. If an organization does not take adequate security measures to protect sensitive data, consumers become open to privacy breaches, which can lead to fraud, identity theft and new attacks in the future. According to a recent survey by Prosper Insights & Analytics, consumers are well aware of the potential threat to their privacy, with more than 60% reporting that they are concerned about their personal identity when shopping online.

Unethical data management that negatively affects customers will directly affect a company’s reputation. When customers no longer trust an organization that respects their personal data, they will take their business elsewhere.

Even in the case of a minor breach, companies can face frustrated customers who may end their partnership, as well as disillusioned employees who will have to quickly repair the damage and implement better security practices. Mishandling data is likely to result in financial losses in addition to reputational damage. According to IBM’s Cost of a Data Breach 2022 report, the average cost of a data breach hit a record high of $4.35 million this year.

Drenik: What can companies do to protect customer data and adhere to data management best practices? What does it look like in practice?

Van de Maele: Although many companies intend to implement best practices, implementation is not yet where it needs to be. Building a robust data governance structure takes time and is an investment that may take time to see a return on investment. Ultimately, leaders must invest the necessary time, tools, and talent to build a strong data culture and implement good data ethics practices in their organizations.

The key to ethical data management is to act transparently. Companies must clearly communicate the type of consumer data they collect, how it is collected and how it is used. Organizations should create transparency in their data policies by outlining the terms and conditions set for users, and all employees should be trained on the policy. Before you make mistakes, develop communication strategies to make sure you are willing to take responsibility for any mistakes.

Drenik: What can consumers do to protect their data and evaluate companies based on ethical data processing rules?

Van de Maele: Consumers who want to protect their data and make sure they are doing business with companies that use data ethically should do their own research first. Many consumers don’t know how their data is used, so they should start by reviewing companies’ transparency policies and any information on their websites about how they use customer data.

There are also many simple, practical ways for customers to limit the amount of data that companies collect from them. According to a recent survey by Prosper Insights & Analytics, 45% of consumers protect their digital privacy by denying tracking permissions for their mobile apps. Other methods may include enabling private browsing and changing social media settings.

Drenik: What role does data analytics play in protecting consumer data privacy?

Van de Maele: Data intelligence is the ability to understand and use your data properly, and part of using data well is using it ethically. Implementing data analytics ensures that an organization’s data is trusted and used appropriately. Companies that incorporate data analytics into their data strategy also prioritize data protection and consumer privacy. This benefits both the company and the consumer, building consumer confidence and helping organizations avoid regulatory fines and penalties.

An important way to intellectually protect consumer privacy is an active approach to data ethics. Responding appropriately to data breaches is good, but it’s much better to proactively take steps to ensure compliance with all data protection policies, set internal policies, prioritize transparency, and monitor data usage to prevent potential breaches. Having the right data ethics and governance in place will allow organizations to maintain consumer trust and be more sustainable in the long term.

Drenik: Thanks for your time, Felix, and for sharing the benefits and best practices of prioritizing data ethics in your organization.