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Will new legislation forever change your use of customer data?

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29th Jan 2014
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Although talk of the midata initiative and personal information management systems (PIMs) have been kicking around since 2011, the whole topic has been relatively easy for businesses to evade – until now. Three years later, the concept has taken real shape and, with initiatives in place in the UK, US, Canada and France, is gaining global momentum. What’s more, the UK government’s programme, which aims to empower the consumer by requiring companies to release individuals’ personal data back to them, could become legislation within the next year or so. This means that even though sharing valuable data with customers may proffer more risk than it does reward for many companies, it could become a gamble that they are compelled to take, no matter how much they fancy their chances.

So, far from spending another year in the relegation zone of management priorities, getting to grips with the midata programme now needs to be up there on the top of to-do lists – highlighted and underlined. In light of these impending developments, Ctrl-Shift has released a paper (midata and the Impact of Customer Data Release: From Talking to Doing) to help organisations understand what the programme involves and how, precisely, it could impact them.  

On paper
So, why exactly are the government rocking the data protection boat? The theory behind the midata scheme is all about allowing consumers to make informed and educated decisions regarding the services and products they use. Up until now, companies have recorded the transaction history of each of its customers and kept it locked away, only to be accessed for their own purposes. Unlocking the vault will give individuals the chance to assess their spending and hopefully identify areas where they could improve economy and efficiency.

The liberation of all that data is also viewed as a way for companies to improve their relationship with their customers. The government have high hopes that it will bring about a new sense of transparency in the supplier-consumer relationship, improving the ever-dwindling sense of trust that the public have in corporate organisations.

It’s predicted that the midata programme could even act as a driver of economic growth. This is mainly due to the fact that having all this data floating about opens up the playing field for a whole new market of personal information services. After all, the consumer has never had access to such data before, so will need a facility to help collect, interpret, utilise and manage it.

In practice
Implementing a system shake up is never going to be a straightforward affair – this we know. For those that currently hold all this data, there is a whole spectrum of issue to consider; matters of the secure storage, safe transition and appropriate use of the newly released data must be addressed.

The customer’s personal journey to data discovery also needs to be facilitated. This means creating clear steps, from making the customer aware of the availability of their data to dealing with their request and releasing the records, not to mention providing knowledge as to how it should be stored and who is should be shared with.

Rewards
It’s a lot to get your head around, but there are rewards to be reaped for the companies that make the effort, according to Ctrl-Shift. Firstly, there are some pretty attractive opportunities here for a revenue-boosting reshuffle. The government have always marketed the midata initiative as ‘a platform for innovation’, in that organisations can choose to step up, restructure their business and meet the new demand for data services – generating new sources of profit in the process, perhaps.

Efficiency is also a biggie. Equipping individuals with information that was previously inaccessible will help services run more productively and economically. For instance, the midata innovation lab has developed a complementary app that they claim could save the energy industry an annual sum of £50 million.

Finally, we all know that modern-day consumers are expecting more and more of their suppliers, and sharing this information with them is a great way for companies to improve relationships, increase positive engagement and gain valuable trust.

Risks
Well, it’s been all good intentions so far, hasn’t it? Companies will do well to remember this as they wade through the inevitable issues of implementation and repercussions. Of course, if the customer, when armed with all the information available to them, realises that their supplier is not meeting their needs as efficiently or economically as they’d hoped, they are likely to up sticks and hotfoot it right over to a competitor. Equally, there is the worry that competitors could get access to this data themselves and use it to their own advantage.

The financial blow of facilitating this mass release of data is rather daunting, too. What if millions of consumers decide to request their data? Producing and distributing would be something of a mammoth task – extra resources would be a must.

For the above reasons, any means of procrastination will look rather attractive to some businesses, but therein lies another midata pitfall. Any heel dragging in the process of instigation is going to send some pretty negative signals to the consumer about the company. Valued customers will understandably grow suspicious at why their personal data is being kept so stubbornly under lock and key – there’s a potential relationship rift if ever we saw one.  

The midata programme is peppered with potential threats to businesses, as well as opportunities to grow and develop. Ctrl-Shift concludes its paper by recommending businesses adopt a proactive approach to this field, thereby limiting the upheaval of any potential legislation.

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