As consumers spend more of their lives online, it’s never been more important to ensure that you’re protecting their information against hackers and using their data to target them ethically.
The best way to keep your clients happy and loyal? Do the right thing and know your responsibilities. In fact, just like a social media strategy, a privacy and security strategy should be a key part of your brand. With that in mind, here’s an overview of what’s been happening over the past 12 months, and what you need to know to stay up-to-date.
The Digital Service Act: the future of marketing
If you’re advertising to customers in the European Union, you need to be across the Digital Service Act, which was launched late last year. Based on how online platforms distribute information, this act has a couple of purposes. Regarding companies such as Google and Meta, the objective is to hold them accountable for the content that’s on their site. And for consumers, the act will better protect their online rights and ensure that advertisers behave ethically.
In marketing, the most significant change will come in how you can target consumers in the EU. The act prohibits online ads that target consumers based on sensitive personal data. This can mean things like religion, sexual preferences or political beliefs. It will also give consumers more information on the ads they are being shown – including if and why an ad is targeting them specifically.
By empowering consumers, these new rules should have a big impact on transparency and visibility within advertising. Now, those in the EU will be informed on why they’re being targeted by an ad and who paid for it. Additionally, they’ll now be able to see whether content is sponsored or organically posted.
Changes in privacy law around the globe
Data breaches are becoming more and more common in the digital age – which is why countries are introducing harsh new penalties for companies that don’t protect consumer data. In the United Kingdom, the 2018 Data Protection Act controls how consumer data can be used by customers. It decrees that, should a data breach happen, consumers need to be notified within 72 hours. By reacting quickly, it means that those affected by the breach can take action to protect themselves and change any details, passwords or sensitive information that was compromised in the data breach.
Australia is an interesting example of how companies are reacting to data breaches, their impact on consumers, and how governments are changing relevant laws. With 2022’s massive breaches of Medibank and Optus – two brands trusted by millions of Australians – privacy and the protection of user data came into the public spotlight. After these leaks were made public, the Australian government launched into action, announcing tougher penalties for companies who didn’t take appropriate care of their customer details. While the previous maximum penalty was $2.22 million, under the new bill, this increased to either:
- $50 million
- 3 x the value of any benefit obtained through the misuse of information
- 30% of a company’s adjusted turnover in the relevant period
Despite these beefed-up penalties and the risks of not taking care of customer data, many companies weren’t ready. According to a report by advisory firm Arktic Fox, only 41% of brands claimed they were prepared for the new measures. Similarly, just 23% were focused on improving things over the coming 18 months. These statistics are damning – especially when building trust is such an important part of branding.
“ Nearly a third of consumers have stopped doing business with a brand that isn’t up to snuff in the privacy and security arena. And if your brand isn’t serious about protecting data, you could be next.”
Australia isn’t the only country that’s been updating its privacy laws in the past 12 or so months. In Asia, countries are reacting in a similar way. Singapore updated its Personal Data Protection Act in 2022, introducing harsher new penalities for companies that experience a data breach. And, like the United Kingdom, organisations also need to promptly contact consumers if their data is compromised.
See opportunities where others don’t (or won’t)
We know that finance brands should focus on trust in times of crisis. And the same philosophy applies here – it’s all about customer confidence in your brand.
Instead of treating them as a chore or a boring thing you have to tick off, why not treat privacy and security as an opportunity to differentiate your business? It could be a fantastic advantage that solidifies your niche in the financial field. After all, according to Cisco, nearly a third of consumers have stopped doing business with a brand that isn’t up to snuff in the privacy and security arena. And if your brand isn’t serious about protecting data, you could be next.
But by taking a proactive approach, you can avoid losing customers, and even attract new ones. In fact, according to that same Cisco report, for every dollar that companies invest in privacy, they see a $2.70 return. In a similar vein, a study by the Harvard Business Review actually showed that being upfront about how customer data is used for ad targeting actually increases click through rates.
These examples prove that privacy and security don’t have to be boring parts of doing business, and that paying attention to them is a great way to increase profits and attract customers – especially in the B2B sector.