Companies and public sector organisations in the UK need to tread warily when it comes to performing customer data analytics. But there are opportunities for those who educate their constituencies and are clear about what customer data is used for.
These are among the findings of consultancy firm Deloitte's first annual Data Nation survey, based on focus group sessions and a national survey of 1,036 adults and teenagers, and carried by polling organisation Ipsos MORI between 30 March and 5 April 2012.
The survey found that while 82% of the UK population is aware their data is collected by organisations, only 29% are confident companies will not sell or share their data with other groups without their knowledge.
Harvey Lewis, Deloitte Analytics research director said: "When looking at data you need to get the perspectives of all the people involved. At the moment the equation is stacked too much in favour of private and public sector organisations. Our question is: 'Have they taken into account perspectives of consumers and citizens?'"
The firm wanted to get under the skin of an obdurate opposition to data use, he said, and gauge how UK consumers and citizens perceive different data types -- for example, personal finance data versus purchasing history. "We found that they do treat data differently, but not as much as we thought they would, and it is subconscious rather than calculated on risk versus benefit trade-offs."
Forty per cent of respondents were confident that organisations do treat personal data securely, which Lewis saw as a good place to build from. "Once they trust an organisation then [the issue is] more that they do not know what their data is used for. They are not educated about that, and there is confusion."
Lewis said that companies and organisations should put simple steps in place, such as a dedicated information charter, which 27% of respondents wanted. But a majority of UK consumers and citizens want stronger laws and safeguards, such as the new EU data privacy directive, over and above what already exists -- 54% in this survey.
"Organisations should spell out clear data policies and make clear the benefits so consumers can make trade-offs [about disclosing data]."
However, he warned that a strong message from the survey was that "the use of insights extracted through sophisticated analytics and coming out of the blue do make people feel uncomfortable. That kind of tailored marketing takes one deeper into realms that have been more private in the past."
The survey found that even with the potential to receive personalised offers, only 17% of people are happy to receive tailored marketing.
"Just because you can piece together someone's life based on the data they leave behind does not mean you should act upon it. There are new moral hazards here," said Lewis.
He considered this a "fairly rare" message.
"It is interesting that the two top things that would cause consumers to break their relationship with a company were data related -- losing data (72%) and selling on anonymized data (56%).
"There is a great risk of a backlash [against data analytics], stemming from even one mistake. However, legislation is getting stronger, and would it not be better to work on improving the trust?
"But with big data one should not let the tail wag the dog. If you allow the technology to dictate behaviour you are at greater risk of [a backlash] happening."
