Advances in data processing technologies have made it easier for companies to collect and analyse personal information. Sometimes this has benefits, making it possible for companies to tailor products and information to suit individual preferences. But it also poses risks. No one — including your customers — wants their personal information falling into the wrong hands or being used for the wrong reasons.
The European Union’s General Data Protection Regulation (GDPR) was introduced in May 2018 to protect citizens from such risks. It applies to all companies in the European Union, as well as companies outside it, that offer products or services to, or monitor the behaviour of, EU data subjects (any person whose personal data is being collected, held or processed). Breaching the GDPR can result in a maximum fine that can be the greater of 4 per cent of annual global turnover or 20 million euros. Even with this huge “incentive”, companies are still struggling to fully implement the GDPR.
Brexit and GDPR
It could be said the United Kingdom voted to leave the European Union without fully understanding all the implications. Within EU member states, personal data flow is unrestricted. If the withdrawal agreement had been approved by the UK Parliament on January 15, 2019, companies would have been assured that personal data would be able to continue to flow until 2020 while a longer term solution was put in place. But now, uncertainty prevails about what to do regarding the handling of data across the European Union and the wider European Economic Area.
And with the Government suffering another defeat on the ‘Brexit deal’ on 12th March and an extension looming we should be mindful that businesses need as much certainty as possible.
So, the message should be clear for UK businesses: In or out of the European Union, apply the GDPR. This is not only about the regulations; it is also a smart move regarding the customer experience.
First, let’s look at what the GDPR entails. It sets out key rights governing the processing of personal data, providing a unified legal approach to data privacy in the European Union.
Is your company transferring customer personal data — names, addresses, emails and financial details — to and from the European Union and the wider European Economic Area (EEA)? Applying the GDPR means you have to review your data flows. What does that data flow journey look like? Can it provide insights into how you conduct business with your customers? Can you use the need to implement the GDPR with better understanding your customer journey?
The customer journey
Whatever the Brexit outcome it’s the responsibility of every company to know where the personal data it processes is going, and that a proper legal basis for such transfers exists. However, many companies have created data management practices that emphasise operations rather than customer service. They are likely running multiple disparate data management systems, designed around the needs of their business, not around the rights of their customers.
Well-established companies have the advantage of already owning the vast majority of customer relationships in the market. However, to maintain that advantage, they need to close the technology gap that exists in their data management processes. The longer they wait, the riskier it becomes. For these companies, GDPR is more of a challenge.
In business, digital transformation is the new reality, and data is intertwined in every aspect of every business. If you don’t want to be disrupted by asymmetrical competition, you need to better understand your customer data and relationships.
As part of sustaining profitable growth, companies need to be able to derive value from data. In doing so, they need to continually earn their customers’ trust on how that data is being used.
GDPR can play a valuable role in doing that. You can use GDPR as a catalyst to understand your customer data, where it goes, how it’s used, who uses it and so forth. It is part of understanding your customer experience — your customer’s end-to-end journey with you. Customer experience is the cumulative impact of multiple touch points with your organisation over time, which results in a feeling of a real and positive relationship. Or not.
Understand your data
The driver in nearly every digital transformation is improving customer engagement. If you’re going to design a better experience for your customers and deliver the new services your customers want, then first and foremost you need to know your customers. You need to know as much as possible about what they want, how they consume your products and services, and how you can help them to consume more efficiently.
Customers have a choice, and customer loyalty is crucial. In developing new market propositions and differentiating yourself from the competition, you need to achieve real customer intimacy. You need to understand the customer journey, and to do that, you need to understand your data.
Implementing GDPR can help you do that.