The transformative potential of our personal data is profound. From healthcare to finance to public services, there is potential for better products, greater efficiency and lower costs. Then there is the direct value our own information can return to us, in the form of insight and understanding of how we live our lives.
However, our most immediate experience of such innovation usually comes from our everyday experiences at the commercial sharp end – the relationships we have with the online services and vendors that are so much part of our lines.
Internet of Me spoke to Mick Yates – a leading authority on how to understand and engage consumers through the use of data – about how control over personal information is shifting from businesses to consumers. For more than 30 years, Mick held senior executive positions at global companies including Johnson & Johnson and Proctor & Gamble, and 10 years working with customer loyalty specialists dunnhumby. Mick is now a leadership consultant, a visiting professor at Leeds University Business School and sits on a number of advisory boards for businesses including digi.me, which sponsors this forum.
So to say Mick is an expert on the nascent personal data economy would be something of an understatement. And when it comes to understanding consumers, it is a question of obtaining more – and more varied – data.
“The problem is there are too many companies trying to control everything, but the shift to the personal data control capability is a reality, and to understand any one individual you really need to understand multiple data sets.
“I know from my background in retail, loyalty programs work because if you buy, say, sugar one week you buy it the next,” says Mick. “It’s a low value, high frequency activity so it’s pretty easy to predict what an individual will do based on that activity. It is a lot harder, even when you stick to retail, when you think about how often you buy a laptop or an iPhone or even a book.
“When you look at Amazon their algorithms will never predict the kind of thing you haven’t bought before, only what you have bought before. It’s really hard for them to say ‘here’s a really interesting book on this subject which we think might appeal to you’ unless you’ve already bought something in that genre.
“So in retail – and, frankly, all other situations including politics for that matter – you’ve got a short versus long term thing. If you’ve got a high frequency activity of low value it’s fairly easy to make a prediction. If you’ve got low frequency activity of high value it is very difficult to make a prediction. To make predictions at low frequency you need different data sources, which is why everybody is trying to get multiple data sources around the same person.
“From a practical, personal point of view individuals – especially now we have these wonderful high-powered computers in the form of smartphones – are the only ones who can access all these data sources. Individuals have the capability now to bring all data together in a way companies and even governments can’t.
“So the personal data economy is poised. Whether we take advantage of that as individuals is a moot point. Whether companies embrace that rather than try to control what they can and keep it to themselves is another moot point.”
Using our data to make products, services and experiences highly personalised makes sense on both sides of any relationship. Organisations can better tailor their offerings to be more relevant and timely which, in turn, stand a better chance of giving us consumers what we want, when we want it.
However, no such discussion of data-driven personalisation is without the attendant concerns over privacy.
This is an area where the arguments are much more nuanced than often first appear, and as far as Mick is concerned the motives for wanting data on individuals and their inclination to share it are often poorly understood.
“We all want personal service but you only get that if you give up personal information,” says Mick. “That is what I call the Privacy Paradox.
“When you call the bank, you go through the interminable call procedure and when you get through to a real human being they still ask you security questions. You’ve done all that, it’s ridiculous.”
Mick points out that once upon a time, shopkeepers understood their customers and knew a lot about them – not just their buying habits, but their lives – through straightforward, face-to-face human interaction. It all seemed perfectly natural and genuine, while offering convenience and personalisation. There was nothing sinister in the interest shown in customers.
Then along came supermarkets and the personal touch fell away in the rush to greater scale, more choice and lower prices. And yet we still want to be recognised, to be known. We just want that to happen in ways that are not creepy or disadvantage us in some way.
Understandably, people’s willingness to share data becomes tested the more personal the data is. Mick highlights the Government’s failed care.data initiative as an example of a worthwhile and well-intended project brought down, largely, by a lack of understanding. Care.data involved sharing NHS patient data with the aim of improving care and research, but was criticised for inadequate governance and failed to win public support.
And yet it is in areas such as healthcare and public services that our data can unlock the greatest value to society and bring the most benefits to us as individuals.
“One of the conundrums with care.data was that everybody got upset that the Government was, in theory, going to sell data to drug companies. But the last thing you want if you’re in a coma in an ambulance is to be pumped with the wrong injection of something you’re allergic to and if your data isn’t connected that’s perfectly possible.
“There are certain things we want to happen and others we don’t and we’re not completely clear about where the boundary lies between what’s important and what isn’t.
“You can argue that your DNA data should be really private – you don’t really want insurance companies getting to see that unless you approve it because that could change your premiums. But if it’s something like a drug allergy, you want that to be as widely known as possible in case you have an accident.”
Knowledge is power
Part of the solution, Mick feels, is to better educate people about the issues surrounding personal data, especially privacy and the need to balance concerns over sharing our information with the benefits it can bring.
“I don’t think we as a society have properly educated ourselves about what is important and what is not and what should be kept private and what doesn’t need to be,” he says. “There is also a misunderstanding over what anonymised versus personal data means. I don’t think enough time and energy is spent making the distinction. You can’t develop new drugs based on an individual’s information, you can only do it based on a mass of information on multiple people with a disease.
“The idea of anonymised data versus personal data isn’t well explained. I also think the cost benefit ratios are not explained. The whole care.data thing was a massive disaster as far as education was concerned.
“We all think – based on what we see in the news – that the minute our data is collected our privacy is breached. Our data has been collected as long as there have been censuses. Our privacy is only breached when somebody uses our data against us. It’s a fine point but a practical one. There is something about having vast amounts of information that makes it really hard to pinpoint a specific individual. There is a certain anonymity inherent in vast data sets.”
“I’m for informed, consent-based, permission-based systems. I do think the education about what constitutes a breach of privacy is woefully lacking.”
Mick describes the current tech and data landscape as something of a Wild West, with consumers left to distinguish good from bad for themselves. How to navigate it should start in schools, says Mick, in the same way pupils might be taught about how society and democracy work.
Introducing standards that are simple to understand would also support efforts to better inform consumers, he adds. At present, the onus is on the individual who too often faces long and complex agreements and onerous terms and conditions in order to use online services.
“What we need is a kind of kite mark for data like we used to have for electrical goods,” says Mick. “It would say something like ‘Number One. I will never use your data for anybody but you’ – that would be an interesting point, I might actually read that. ‘Number Two. I will anonymise your data and share it with other people if you allow me to’. And so on.
“They would be bullet points. I do think there is a case to be made to add some of those kite mark principles to make it really, really clear to people what is going on.
“With care.data, had the Government said ‘we will not sell any of your personal information to anybody unless you agree’, that would have been a nice start, but they didn’t. They didn’t say clearly enough they will only sell anonymised data either.
It’s the simple things we need to get back to.”
Legislation that enshrines empowerment and protection for the individual will play a big part in making that shift in control actually happen. Consent for using personal information is at the heart of the new EU General Data Protection Regulation, along with a raft of responsibilities and restrictions on organisations over how they use people’s data. Another EU directive, PSD2, allows third party providers to access a customer’s bank account information, bringing an end to the banks’ monopoly over such data.
“The weight of pressure behind legislation of different kinds is all going to help,” says Mick. “I think Europe is in a much better place than the US. People there too often seem to assume you get away with whatever you can until you get caught.
“I think Europe has taken a better view about protecting the individual and it’s up to companies to prove why they should have your data – not the other way round. That’s the basic principle at stake.”
If there is more work to be done to sell the many benefits of sharing personal data, companies also still need convincing of the value to be had from handing control back to consumers – even with legislation adding to the momentum in that direction. Internet of Me asked Mick if he believes businesses can see the potential to differentiate themselves by overcoming their fears of ceding control to their customers.
“Companies do still want to keep control for competitive advantage,” he says. “They seem to forget that the cost of data is trending to zero, while its availability is trending to ubiquity. Actually, a company wins not by being secret but by being open about what they are trying to do, in my opinion.”
So will we make it to the promised land or will our attempts get frustrated along the way? There will be a bit of both on the road ahead, Mick believes.
“Owning your data, data transparency and permission-based systems are the way forward because it gives people at least the opportunity to take control of these things. I think the future will become more permission based. I think the general trend – certainly of EU legislation and the actual thinking behind personal data issues – is a good one and is in the favour of the individual. I think as we get more educated we will figure out how to do more with this.
“Also, being slightly cynical, I think a whole bunch of companies will continue to try and mess us around and take advantage of this without really helping us get to grips with it ourselves. It’s a bit of a battleground. I would be generally optimistic about personal control of data and personal privacy will get the upper hand. I think it already has. You’ve only got to look at the brouhaha over the encryption of messaging services to see the consumer has won– having your Facebook and Whatsapp messages encrypted so even Apple can’t break in can only be a good thing.
“The general thrust of technology and legislation is good. I think the thrust of education is not so good. We don’t do enough to explain.”
So, an optimistic view of the future, albeit one rooted in practical realities. As Mick says, the personal data economy is ‘poised’. Innovation will continue to offer us benefits compelling enough to share our information. Legislation and, hopefully, a cultural shift in the way organisations use that information will make us more comfortable in doing so. The real winners will be those businesses who build in trust by offering consumers control.