Companies entrusted with its customers' financial data are shifting their messaging to emphasize the steps they are taking to ensure the safety of that data.
In 2020, the average consumer viewed privacy as a competitive differentiator for the first time. The change was hardly surprising, given the sudden, seismic digital transformation of consumer shopping habits amid the coronavirus pandemic, as well as concerns about TikTok's use of data dominating headlines in the late summer.
With 64% of Americans stating they would blame the company, not the hacker, for loss of personal data, according to RSA Security, and 82% believing that there should be a national privacy law to protect their personal data, according to Pew Research, it's clear that data privacy is on track to become a key consideration in consumer purchasing decisions.
Google announced that it will phase out cookies by 2022, making 2021 the year that brands and businesses need to alter their retargeting strategy. This move signals a broader industry transition toward permission-based marketing.
“Users are demanding greater privacy—including transparency, choice and control over how their data is used—and it's clear the web ecosystem needs to evolve to meet these increasing demands," says Justin Schuh, director of Chrome engineering at Google.
The European Union is often seen as the pinnacle of user data and user privacy laws, with some of the strictest business laws surrounding how user information can be stored and used. In 2020, the first state-wide user privacy laws were implemented in California with other states starting to follow suit, using the California Consumer Privacy Act as a benchmark to inform future legislation.
Meanwhile, TikTok, the China-owned short-form video app, made waves when it reached 2 billion downloads and set the record for app installs in a single quarter in April 2020. Though popular among Generation Z—the rising consumer demographic born 1996-2010—data privacy concerns led to then-President Trump briefly threatening to ban the app in the U.S.
More than three-quarters of Americans are concerned about how their data is being used by companies, with 92% saying that companies must be proactive about data protection, according to Pew Research. This means that stricter data privacy laws in the U.S. are almost a certainty at this point.
Brands—particularly brands entrusted with users' financial data—will shift their public messaging to emphasize the steps they are taking to ensure the safety of that data. This means that any company or industry that sorts and analyzes large data subsets could be asked to prove how they protect consumers' privacy, with areas of interest including predictive analysis, business intelligence, software as a service and facial recognition, among others.
As the brand and audience relationship becomes increasingly digital, brand transparency about user data will serve as a way to foster greater trust between brand and consumer, creating an increasingly competitive advantage for companies willing to reach out and embrace the change.
Jin Kim, CEO of Creative Digital Agency, has spent more than a decade spearheading innovative strategies and campaigns for clients all over the world, including Airbnb, Merck Pharmaceuticals, PepsiCo, Barefoot Wine and a portfolio of Fortune 500 consumer brands.