Companies Reminded of Fragile Consumer Trust Ahead of GDPR
The majority (64%) of customers trust companies with their personal information. However, Baringa Partners warns that businesses will have to work much harder to maintain levels of trust when General Data Protection Regulation comes into force. Baringa’s new report explains how customer behaviour is changing and advises companies on preparing to meet their demands.
Companies would be wrong to assume that data privacy is an issue the public are unaware of or uninterested in. The research reveals many customers would take serious action in the event of a significant personal data breach, with up to 55% at risk of walking away from their bank, energy company or TV, phone or internet provider. As many as 30% of affected customers would ‘switch provider immediately’ and a further 25% would ‘wait to see a media response or what others say and do’ before switching.
The findings also show that customers are likely to care more and do more about their data privacy in future. Under GDPR, individuals will have the right to find out whether or not personal data concerning them is being processed, where and for what purpose. Companies will be obliged to return a free electronic copy of the individual’s personal data within thirty days, a service up to 70% of customers say they are likely to take advantage of. No company knows exactly how many customers will submit such a request, but firms with millions of customers are likely to face serious operational challenges.
To earn a reputation for good data privacy management, companies must go beyond hygiene factors. Those that strive to better understand their customers’ fears and needs, and actively communicate the mutual benefits of data sharing, will discover opportunities to gain a competitive edge over their peers. Companies are currently some way off this reality. The majority of customers (67%) do not want to share additional data about themselves with their existing providers, and even fewer would be happy for this information to be shared with third parties (74%). However, the main reason people would be happy to do so is to ‘get cheaper products or services’ (18%), demonstrating that where there is tangible value in it, customers are more open to sharing their data.