A report by Boston Consulting sponsored by Liberty Global claims exploitation of personal data could be worth $670 billion annually by 2020.
The consultant says that value represents both ‘organisational’ and consumer economic benefits but will only be achieved if people ‘trust’ organisations with their personal data. Most of the value is in cost savings driven by lower prices from ‘data-driven cost synergies’.
The study polled 3,000 consumers and stated that two thirds of that benefit will be lost if trust of organisations with data isn’t much improved.
“The opportunities presented by the responsible sharing of a person’s digital identity are enormous, but can only be gained if digital identity is handled in a safe and transparent way,” says Manuel Kohnstamm, Senior Vice President and Chief Policy Officer of Liberty Global, Inc. “It is critical that industry takes the lead to establish a trusted platform for the flow of personal data, otherwise, significant value for consumers and industry alike will be lost.”
John Rose, Senior Partner at BCG and co-author of the report, adds: “Leveraging personal data and digital identity can be a key growth driver in an overall stagnant European economy—potentially worth up to 8 per cent of GDP by 2020. Yet our research shows that two-thirds of this value is at risk given current consumer concerns about privacy and lack of control. Our survey also suggests that it will be critical for companies, governments, and non-profit organisations to establish and execute personal data applications against crystal-clear, transparent principles of use and easy-to-use controls that are tailored to the context in which the data will be used.”
The report concludes that, in order to unlock the full value potential, business and political leaders need to embrace a new paradigm for digital identity applications:
• Benefits. Most consumers are willing to share their personal data, given sufficient awareness on the benefits of digital identity applications and the implications for data collection and usage.
• Responsibility. Personal data needs to be recognized as a highly valuable asset, requiring an adequately high level of security, and a limitation to the least sensitive data for the targeted use.
• Transparency. By being open and clear about their data processes, organizations effectively mitigate confidence risks and attract more informed customers to their platforms and applications.
• Control. Individuals’ preferences regarding data sharing differ widely. Easy-to-use options and controls allow individuals to adapt their sharing to their specific needs.