# Why GDPR could be the key to re-building customer trust Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-10-31 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: The Importance of Data Management in the Digital Economy Meta Description: Learn why GDPR regulations are changing the way businesses handle customer data and how non-compliance could lead to heavy financial penalties. URL: https://financedigest.com/why-gdpr-could-be-the-key-to-re-building-customer-trusthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd311017-3-1736843324559-compressed.jpg) _By **Adam Maskatiya**, UK and Eire General Manager, Kaspersky Lab_ Big data is big business. The amount of data being collected and distributed has grown at an exponential rate. [According to IDC](http://www.seagate.com/files/www-content/our-story/trends/files/Seagate-WP-DataAge2025-March-2017.pdf), 163 zettabytes of data will be created globally by 2025. That’s equivalent to watching the entire Netflix catalogue 489 [million times](https://www.financedigest.com/coca-cola-hbc-flags-one-time-195-million-hit-from-russian-operations.html "Coca-Cola HBC flags one-time 5 million hit from Russian operations") and a ten-time increase from the 16.1ZB of data generated in 2016. This explosion of data has undoubtedly been a huge positive for businesses, who now know more than ever about their customers, enabling them to tailor [communications and create personalised experiences](https://www.financedigest.com/one-app-for-a-total-communications-experience.html "One App for a Total Communications Experience") that simply weren’t possible a few years ago. And it’s not just large enterprises that are realising these opportunities. By using [data in the right way](https://www.financedigest.com/soft-lending-and-inflation-data-pave-way-for-smaller-ecb-hike.html "Soft lending and inflation data pave way for smaller ECB hike"), SMBs and even start-ups can give corporate giants a serious run for their money, as the likes of Uber and Deliveroo have demonstrated. Data has clearly become the foundation of our digital economy, but a ‘collect as much as possible and decide what to do with it later’ approach has resulted in businesses being careless with [customers’ personal](https://www.financedigest.com/meeting-customers-where-they-are-through-financial-inclusion-and-hyper-personalization.html "Meeting Customers “Where They Are” Through Financial Inclusion and Hyper-Personalization") information. Because this data has come to represent so much [value for businesses](https://www.financedigest.com/pediatric-hiv-infection-treatment-market-by-covid-19-impact-analysis-volume-and-value-revenue-business-opportunity-future-projections-and-key-trends.html "Pediatric HIV Infection Treatment Market By Covid-19 Impact Analysis – Volume And Value, Revenue, Business Opportunity, Future Projections, And Key Trends"), the emphasis has swung to the collection, rather than the management, of data. Organisations know that they can’t [risk missing out on the data](https://www.financedigest.com/omicron-poses-very-high-risk-but-data-on-severity-limited.html "Omicron poses ‘very high’ risk but data on severity limited") wave, so have been intent on building out their databases as much as possible. As a result, bad data hygiene is now all too common. A combination of complacency and bad habits is playing into the hands of cybercriminals, as illustrated by the recent spate of high-profile [data breaches](https://www.financedigest.com/amazons-twitch-hit-by-data-breach-due-to-configuration-error.html "Amazon’s Twitch hit by data breach due to configuration error") affecting organisations such as Bupa, Verizon and Wonga. Just as importantly, [customer relationships have also been impacted](https://www.financedigest.com/impact-com-fiscal-year-h1-2021-1-5b-valuation-150m-in-funding-bigcommerce-integration-69-customer-growth.html "impact.com Fiscal Year H1 2021: .5B Valuation, 0M in Funding, BigCommerce Integration, 69% Customer Growth"). Poor attitudes towards personal information have translated into a breakdown of trust between [businesses and the very audience they are trying to attract](https://www.financedigest.com/california-attractions-smart-entrepreneurs-use-to-attract-business.html "California Attractions Smart Entrepreneurs Use to Attract Business"). Clearly this needs to change. **The GDPR-effect** New [Global Data](https://www.financedigest.com/hot-u-s-inflation-data-reignites-global-selloff.html "Hot U.S. inflation data reignites global selloff") Protection Regulations (GDPR) are now less than a year away from becoming enforceable across the European Union, causing businesses to finally sit up and take notice about how they share, process and manage customer data. With any breaches of compliance [set](https://www.financedigest.com/uks-finance-minister-sets-out-new-economic-approach-to-finance-bosses.html "UK’s finance minister sets out new economic approach to finance bosses") to be met by hefty financial penalties – up to 4% of annual turnover – the majority of businesses simply can’t afford not to take the regulations seriously. In most cases, this means that data-related processes will have to either be updated or significantly changed, a realisation that has been met with panic by many companies that have to deal with issues such as complicated technology architectures, a limited understanding of the regulations and a lack of executive support. For consumers, many of whom have lost faith in the process and are now paying more attention to what happens with their personal data, the [outlook is much more positive](https://www.financedigest.com/sales-forecasts-of-automotive-parts-remanufacturing-market-reveal-positive-outlook-through-2026.html "Sales Forecasts of Automotive Parts Remanufacturing Market Reveal Positive Outlook Through 2026"). GDPR promises a transparent future where [data is properly managed and treated as a valuable commodity](https://www.financedigest.com/uks-ftse-100-gets-a-lift-from-commodities-as-u-s-inflation-data-looms.html "UK’s FTSE 100 gets a lift from commodities as U.S. inflation data looms") rather than an expendable asset. If it isn’t, [businesses know they will face](https://www.financedigest.com/saving-on-water-bills-more-than-just-a-drop-in-the-ocean-for-businesses-facing-the-cost-of-living-crisis.html "Saving on water bills: More than just a drop in the ocean for businesses facing the cost-of-living crisis") the consequences. So, there seems little doubt that GDPR is a welcome and much-needed piece of legislation, but the question we want to ask is: will businesses use the legislation as a much-needed excuse to re-build their relationship with customers and establish a level of trust that has been worn down by years of poor data hygiene? The answer, we believe, comes down to a matter of respect. **R-E-S-P-E-C-T** Until now, regulations have been slow to catch up with how businesses are using customer information, allowing them to [move data](https://www.financedigest.com/dollar-moves-off-lows-on-heels-of-inflation-data.html "Dollar moves off lows on heels of inflation data") around without the fear of serious repercussions. As a result, firms have [become lazy and customer data](https://www.financedigest.com/becoming-data-ready-for-mtd-for-corporation-tax-aligning-vat-and-ct.html "Becoming data-ready for MTD for Corporation Tax: aligning VAT and CT") has been treated without respect. It should be noted that consumers must also shoulder some of the blame here. We, as a society, have become used to freely sharing our personal information, without spending too much time (if any) thinking about who has access to it or how it will be used. But, while we might expect this data to be used for personalised targeting, what we have actually ended up with is a spam culture where our information gets [shared around various third parties and we find ourselves receiving annoying emails from companies](https://www.financedigest.com/exit-from-taiwan-lifts-shares-of-french-company-carrefour.html "Exit from Taiwan lifts shares of French company Carrefour") we’ve never even heard of. GDPR has finally forced these issues into the spotlight. Personal data hasn’t been treated with the respect it deserves in the past, and [consumer trust](https://www.financedigest.com/trusting-in-trust-marks-enhancing-consumer-trust-in-your-ecommerce-business.html "Trusting in trust marks: enhancing consumer trust in your ecommerce business ") has been damaged as a result. Now is the time for change. There has long been a business case for managing [data securely](https://www.financedigest.com/cyber-security-data-re-assurance.html "Cyber Security: Data ‘Re’-Assurance") and efficiently, but it has never been much of a priority until now. [Businesses have become content to continue collecting vast amounts of information on their customers without placing](https://www.financedigest.com/esg-investment-making-your-business-a-more-sustainable-place.html "ESG investment: Making your business a more sustainable place") the required emphasis on how it flows through the organisation. As a result, businesses often [don’t know](https://www.financedigest.com/women-in-technology-that-you-should-know-but-probably-dont.html "Women In Technology That You Should Know (But Probably Don’t)") how much data they actually have, where exactly it is all stored, or even what it is used for. Studies have suggested that just 50% of an organisation’s available data is used for decision making, with the rest contributing to the ‘dark data’ that is collected during regular business activities but fails to be used for other purposes. The [threat](https://www.financedigest.com/the-future-of-finance-how-to-defend-against-the-top-threats-to-cloud-security.html "The Future of Finance: How to defend against the top threats to cloud security") of serious financial penalties, public shaming from regulatory bodies such as the UK’s Information Commissioner’s Office, and the risk of alienating potential customers, has now served to alter this mindset and wake businesses up from the data stupor that has become commonplace. By making sure employees use data in the right way, and by creating a [culture where data](https://www.financedigest.com/how-to-drive-a-data-culture-in-the-finance-industry.html "How to drive a data culture in the finance industry") is the responsibility of everyone in the company, businesses can get on the right track to treating data hygienically, and with the respect it deserves. Achieving this will go a long way towards re-establishing the level of trust which is now required in today’s ultra-competitive business landscape, thereby increasing brand [loyalty and also helping to attract new customers](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW") in the process. It’s still relatively early days and there is plenty of work to be done, but there’s [hope that GDPR will dawn a new era in the business world](https://www.financedigest.com/world-stocks-climb-on-hopes-of-successful-debt-ceiling-outcome.html "World stocks climb on hopes of successful debt ceiling outcome"). One where businesses respect the [data in their care](https://www.financedigest.com/crowdsourcing-of-data-to-drive-the-neonatal-infant-care-market.html "Crowdsourcing of data to drive the Neonatal Infant Care Market"). --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---