Another day, another Facebook news story. Since the Cambridge Analytica scandal, the spotlight has been relentlessly focused on the social media giant’s next moves. Last week the WSJ announced that Facebook had been in contact with banks and financial institutions asking them to share detailed financial information about customers, which has only spurred on further backlash against Facebook from commentators worried about personal data implications.
The reality is that Facebook won’t be the only brand looking for these partnerships to learn more about their customers – it’s understandable – data is a necessity to get great insights and provide better services for consumers. So how can we approach this better? Now more than ever, a consumer-centric strategy is key.
The WSJ’s article put Facebook on the back foot, leaving them to clarify what its true plans were. Despite making it clear that the financial data piece would be opt-in only, the damage was already done.
The growing consumer awareness around privacy issues, manifesting in distrust of data-sharing, concerns over how data will be used, and frustration when targeted with inappropriate services as a result of crude data collection techniques, has created an extremely challenging environment for all businesses.
How can you capture the data you need, whilst respecting privacy and complying with GDPR regulation? Both brands and banks alike need to radically rethink how they build and retain customer relationships – and some have turned to relationships with third parties in an attempt to achieve this.
Getting a slice of the data pie
From all the information you’ve shared with Facebook, it’s built a digital version of you. In this specific case, the addition of financial information will help Facebook to paint an even more detailed picture of its users, gaining further insight above what it’s already collected.
Your purchase history might feel particularly personal, but it’s just one small slice of the data that exists on you. Wear a Fitbit? Listen to music on Spotify? Share your photos on Instagram? The data we hold just on our smartphone apps can reveal a complete 360-degree view of our lives.
The dream for any organization is to have not just one slice of data, but the whole pie, so it can target you correctly. Brokering partnerships with every single owner of useful data on your consumers is near impossible, even for the tech giants like Facebook. There has to be a better way of getting these details – and that’s where involving the consumer is essential.
Power to the people
Putting personal data back in the hands of the consumers is a much more effective approach than scrambling for deals to get more slices of the data pie. Flipping the tables, and giving consumers the ability to securely share their data with trusted companies in a mutually-beneficial exchange, is a much stronger plan.
This approach, known as a value exchange economy, benefits individuals and businesses of all sizes. With so much consumer concern about personal data, promoting the sharing of data might sound like the opposite of what they want. But ultimately, why wouldn’t we share some of our data if we had complete control over what was shared, and got benefits for doing it?
My view is that everyone has the right to own their personal data and to choose who they share it with: open consent, privacy and secure data portability are key to enabling this, and this approach is also better for brands.
For example, a consumer could share details from their other bank accounts with their credit card company, and get an increase on their credit limit in return. Instead of only seeing a slice of someone’s data, a bank for example, benefits from truly understanding their customer’s 360-degree data profile, and as a result, the customer gets a service that understands their needs and provides the right recommendations and advice.
A value exchange economy isn’t blue-sky thinking, it’s a tangible approach available today that helps to level the playing field for brands and consumers alike. The lesson learnt from Facebook is that brands need to take a far more innovative approach to customer data – going direct to the individual with meaningful offers to spark a data exchange.
Rory Donnelly is CEO of digi.me.