As we move into 2023, one thing at the forefront of many business owners’ minds is how to ensure data privacy in order to keep their company data and customers safe. 

Data privacy is becoming increasingly important to both companies and consumers, especially with the emergence of privacy regulations such the California Consumer Privacy Act (CCPA). These laws enhance privacy rights and consumer protection for consumers and may serve as a bellwether of more regulation to come, both at the state and federal levels.  

These developments will affect brands, marketers, and data providers alike. How can businesses prepare for these developments, and what can we expect in the overall data landscape in the immediate future? 

Data-as-a-Service and Cloud-Based Data 

Many companies are turning to data-as-a-service as a way to manage their data. Although this allows businesses to launch data services without investing in the systems and personnel to manage their data, the downside is companies don’t always have direct access to the servers running their database. 

Hosting data on the cloud rather than a localized device helps businesses store their data in a more efficient and flexible way. As data continues to become more advanced, these cloud-based management systems can be easily updated and maintained. 

That said, companies should be wary of what data brokers and data providers they partner with in these new environments, as transparency in data privacy is the new normal and important to consumers when making purchasing decisions.  

Automation in Data Management

Many companies are adopting artificial intelligence (AI) and machine learning (ML) to streamline Data Management tasks. Automating data management can save time and resources and help cut down on manual efforts. 

Although this can be a great benefit, as AI evolves, it presents a threat to data privacy, security, and regulation. AI needs a great deal of data to work to the best of its ability. Like many of us, AI learns by doing. That said, businesses need to ensure transparency about what the data they are feeding an AI tool is being used for and that they have a legal and legitimate reason to use it. 

The world of online data privacy has been relatively lawless, until quite recently. The CCPA and the EU’s General Data Protection Regulation (GDPR) are making strides in privacy, but we still haven’t scratched the surface when it comes to data protection. 

What Consumers Want Companies to Know 

There is a fine line between what consumers want to share with companies and the control they want over their personal information. For example, you might want your Stitch Fix stylist to know exactly what you might want to wear this season, but you don’t want third-party cookies to get a hold of your email, phone number, credit card information, etc. 

Both the CCPA and the GDPR require that websites ask for consent to track visitors’ browsing activity beyond their own websites. Based on these laws, consumers should be able to opt out of this tracking. This will likely become a more widespread practice in the future.

We’ve all been there: We put in a Google search for chess sets, and all of a sudden, we’re bombarded with ads about chess sets in our browser for weeks afterward. Under the newly updated California Privacy Rights Act (CPRA), an amendment of sorts to the CCPA, these practices will be illegal ​​if a consumer has withdrawn their consent to the sale or share of their personal information. This act will more explicitly address technologies such as AI and their use. 

More Power, More Responsibility

In short, the immediate future for data privacy brings a greater onus on data users to ensure that data policies and procedures meet current regulatory standards and anticipate further regulation down the road. There are three essential points to keep in mind here: 

Transparency is key. Consumers want to be able to trust that the brands they are purchasing from have robust privacy policies in place and that their data will be safe and secure. As consumers become more aware, businesses will have to make the proper privacy adjustments. They must be willing to clearly disclose what data they collect, how they use the data, and how  a consumer can opt out of data sharing and/or collection.

Data quality is crucial. Companies need to know that the data they are using is compliant, and that any data they receive from outside parties is responsibly sourced. Consumers are searching for this quality guarantee. 

Verification matters. The use of independent data verification services can help companies rest easy, knowing that the data they collect was obtained in a way that is safe and legal and guarantees the quality consumers are looking for. This also goes for data from third parties. The stakes are too high to rely on vendor promises. 

When consumers feel that their data is in good hands, they are more likely to interact with a company or brand regularly. People want to know that their information is safe and secure, and they want a choice in who has access to it. Personalization and privacy do not have to be mutually exclusive. With the right transparency and data verification, companies can ensure the return customers they need to thrive in 2023 and beyond.