The Data Value Exchange: What Businesses Should Know About Consumer Expectations

Data is contextual and invisible, making it hard for individuals to understand how it is being used, and it’s easy for their trust to be abused. Today’s environment asks business leaders and their organizations to step up and recognize their duty to develop responsible data practices and define their data ethics. This need has only been magnified during the current pandemic.

In particular, how consumers and businesses value data — and the gap between those different perspectives — has continued during this challenging time. At Mastercard, we recently sponsored a new global study developed by Harvard Business Review Analytic Services, “The Great Data Exchange: What Businesses and Consumers Value in the Digital Economy,” where we explored this dynamic.

To deliver tailored experiences, products and services for consumers, providers use the data collected to create “portraits” of individuals — their preferences, habits and characteristics. Unfortunately, people are not always aware of the amount or the type of data being collected to enable these personalized solutions. In addition, according to the study, businesses often overestimate the value consumers feel they’re getting in exchange for their data. While 60% of executives agree that consumers think the value they’re getting in exchange for sharing their data is worthwhile, only 44% of consumers feel the exchange is worthwhile. In addition, one-third (33%) of consumers want organizations to stop sharing customer information with third parties while only 10% of businesses see this as a concern.

Now, as we navigate changing market conditions with COVID-19 as a backdrop, it is even more vital that our shared interest should be a cause of accord rather than tension. Everyone wins when businesses, governments and other users of data more explicitly orient this value exchange around consumers’ priorities and concerns, even as products and solutions continue to evolve.

Another discrepancy we noticed from the results, and that we can only assume will become top of mind as the current pandemic continues around the globe, is around location data. One-quarter of consumers cite location data privacy as a top concern, compared with only 8% of business executives. We’re seeing this perspective play out with the public’s reaction to contact tracing apps. While they provide a much needed benefit to track the spread of the virus and protect people around the world, consumers must provide a significant level of personal data and they need to have that trust that it will be used responsibly and protected.

But how do we close this gap?

A response is needed. Managed responsibly, data benefits consumers and the businesses that serve them. The keys to all of this are trust and transparency. They must be at the center of what we do and how we work.

We believe that society must redefine how the system works, with control moving from the data collector to the true data owner — the individual. This requires all players to establish data practices and manage innovation with individuals at the center of consideration. Although this is challenging, our study is not without good news. Thirty-one percent of consumers want to give customers more control over how their information is used, and organizations have the opportunity to think differently and embrace the change. Only ethical data innovation will result in sustainable results that can move society forward in meaningful ways.

For decades, our strategy has always been to support our partners, like business and governments, in whatever challenges they face, and this role has only heightened in light of COVID. Our services are helping businesses and governments around the world to assess, react and plan through the current crisis as part of our Recovery Insights program.

Our data-driven insights and analytics help our partners identify key trends and learn from them. Technology like test-and-learn can help pinpoint smarter decisions, big and small that lead to better outcomes. An example of this can be seen in our recent work with HEMA, the Dutch variety store chain, and how they used data-driven insights during COVID. We have platforms that can drive meaningful engagements that enhance the consumer experience and, ultimately, drive business forward. And we have a principled approach to everything that we do, ensuring our data-driven practices are centered on privacy, security and decency. After all, in today’s interconnected world, our actions impact one another more than ever.

Last fall at Mastercard, we established a core set of “data responsibility principles” guiding the ethical collection, management and use of data. When it comes to data—and treating personal data with decency—Mastercard believes that:

• You own it — Every day you produce data. That data belongs to you.
• You control it — You have the right to understand and control how your data is shared and used.
• You should benefit from the use of it — Your data should be used to make your life easier and richer.
• We protect it — Your data will be kept secure and used responsibly.

When we tested these ideas with consumers around the world, 9 out of 10 said that they would trust companies that can live up to these principles. During the COVID pandemic, holding tight to our principles remains critical. After all, in today’s interconnected world, our actions impact one another more than ever.

As our digital world continues to evolve, innovation must be coupled with ethical, sustainable data practices to ensure a system where everyone benefits. Consumers today place a heavy emphasis on data privacy, but they also appreciate the personalization that comes with data sharing. There is still room for growth along a number of dimensions to make sure the data value exchange between businesses and consumers is mutually beneficial. Improving transparency to inspire consumer trust is one step, including greater transparency in how organizations collect, process and share information. Better data practices and ones built to assist individuals to understand how their information is used are important steps as we continue to build our digital world and solve commercial and societal problems. We hope the findings of this report inspire the innovation needed to continue to drive this progress.

DIMITRIOS DOSIS BIO

Dimitrios Dosis is president of Advisors at Mastercard and a member of the company’s management committee. He leads a global team focused on helping retail and banking customers solve pressing business issues with data-driven services. Mastercard’s anonymized and aggregated transaction insights, world-class analytic capabilities, and embedded platforms with self-service predictive technology supplement the team’s industry-proven problem-solving skills. The team’s results-focused approach combined with leading-edge technologies and strong data assets deliver value to customers and create differentiation for the company. Dimitrios has more than 20 years of experience in technology, transaction banking and management consulting. He joined Mastercard in 2005 from Roland Berger Strategy Consultants, where he was leading the transaction banking practice. Previously he worked for A.T. Kearney covering financial institutions business. He holds an MBA and Ph.D. from the European Business School as well as a Master of Economics from the University of Hagen.

JOANN STONIER BIO

JoAnn C. Stonier serves as Chief Data Officer for Mastercard, leading the organization’s data innovation efforts while navigating current and future data risks. She oversees the curation, quality, governance and management of the company’s extensive data assets, as Mastercard increasingly looks to deepen the strategic value it can provide its merchant, banking and government customers and cardholders through its expanding data-driven products and capabilities. Stonier previously served as the company’s Chief Information Governance & Privacy Officer, responsible for global privacy and information governance, and leading regulatory engagement for data compliance. She is a recognized and highly sought-after thought leader in emergent data and privacy issues. Stonier has advised industry executives, governments, intergovernmental organizations, and NGOs. Currently, she serves on the United Nations Expert Group on Governance and Artificial Intelligence and the World Economic Forum’s Global Future Council on Data Consumption. Stonier also serves as a board advisor for Truata, a data trust co-founded by Mastercard and IBM, on the board of directors and Governance Committee for Hope for The Warriors, a nonprofit Veteran service organization, and on the board of trustees and the executive and finance committees for Academy of Mount St. Ursula, where she attended high school in Bronx, New York. She received her Juris Doctorate from St. John’s University and her Bachelor of Science degree from St. Francis College. She holds memberships in the Bar of the State of New York and the Bar of the State of New Jersey. She is based in Purchase, New York.