Digital Companies: a Regulation or a Trust Issue?

May 15, 2014 --

The Chamber of Commerce of Paris was running this week their fourth annual Big Data Forum supported by Enterprise Europe Network. The focus of the day was the uses of big data. I was honored to be invited as a panelist, to discuss how the software industry was a key member of the big data ecosystem. Other presenters included industry luminaries, and big data practitioners from large European/global companies such as Orange, Allianz, Publicis or La Poste.

Many of the discussions revolved about all the great projects you can do with big data, how you can get insight into operations, into consumers, leading you to ultimately become a true digital company. With a caveat – and a sizable one: what about privacy laws and consumer consent? Indeed, France is one of the most regulated countries in that regard but the rest of the European Union is not very far behind. The basic rule is that you must obtain consent from the consumer to use their personal data in a specific way. If you did not obtain consent for a specific usage, you need to get back and obtain it – or not use the data. But what happens when you don’t know in advance how you will use data? Isn’t this the whole promise of data science: to find new, innovative ways to leverage data assets?

In any case, how does a company gain consent from its consumers? This very topic drew lots of attention from the panelists and the audience. The key to gaining consent is trust. Consumers are much more likely to give consent to use personal data to organizations they trust. And today, trusted organizations are primarily the digital economy organizations – the ones that give before they take. Ask yourself, who are you more likely to trust to use your data: Google and Amazon, or your bank and mobile operator?

Digital companies are already providing value, even before you start filling out forms, even less pay money. Google give you Search, Maps, Streetview…  Then, with just a short form, you get gigabytes of storage, an email account, Google+, Google Docs… all of it without paying a single cent. Amazon lets you compare prices, review product features, check out book reviews… In comparison, what does your bank or mobile operator “give” you? A locked-in contract, unclear fees. Whether these are appropriate or abusive is beyond the point. But from the consumer standpoint, the fact is that Google and Amazon are much more “trustable” with data than telcos. Or than banks – even though consumers entrust these with their money!

In order to be able to truly pivot toward a digital model, traditional economy companies need to win on these two fronts: the regulatory front, and the trust front. Neither are easy battles.