Digital privacy is on the ropes, and public cynicism is running high. But there are glimmers of innovation in what could be a new phase for Big Data: empowering the customer.
Fitbit and usage-based insurance (UBI) programs are prime examples of ways in which individuals can choose to trade personal data in a transparent market transaction. Organizations that make this possible, treating customers like data owners, can distinguish themselves competitively, increase brand loyalty and reap financial rewards. According to a recent survey by SDL, about half the consumers in the U.S., U.K. and Australia are willing to share personal information with vendors in exchange for loyalty programs and/or product/service incentives.
“I think a defining moral issue of the next decade will be that nobody should know more about your life than you do,” said Alistair Croll, founder of Solve For Interesting, in his keynote address at the Strata + Hadoop World conference in San Jose, California in February. Croll asserted that we are in “year zero” of a 10-year phase in which modern culture will be transformed by a “life feed” of information flows that Amazon, Facebook, Google, Apple and Microsoft have the power to orchestrate.
But all of us, businesses and consumers alike, have a role to play. And the businesses that invite their customers to engage in transparent data transactions will create outsized benefits on both sides of the trade.
Personal Health
Wearable health devices make sense: informed people make better lifestyle decisions. And informed doctors provide better care, creating the right incentive to share vital data.
Startups like CipherHealth enable individuals to send sleep, diet and exercise metrics through wearables such as Fitbits to their doctor. Signs of risk prompt a reminder call to the patient, to ensure they visit the doctor when blood pressure spikes, their weight drops, etc. and solve problems before they get out control. This is just the start: Apple Watch and Apple HealthKit are spawning the creation of apps that help consenting users take their medication, adjust exercise, get recommended screenings and find the right doctor. One Drop is a free new app for diabetics to track and share their glucose, food, insulin and physical activity in exchange for tips about eating and living better.
Technology is helping a trend that is on the rise. Seven in 10 U.S. adults track a health indicator for themselves or someone else, and a third of those share data with others, according to research by the Pew Internet Project. Nearly half of them say personal health tracking has changed their approach and/or prompted new questions to their doctor. The results are reduced hospital visits, fewer costly hospital visits and better patient outcomes. Both sides benefit.
Usage-Based Insurance
Parents, commercial truckers and individual motorists now have the option to track their driving behavior with vehicle sensors, feeding personal driving profiles that are factored into auto insurance prices from companies such as Progressive. Both parties know more about their risks, and the resulting insurance price is more accurate. In addition, concerned parents and fleet operators are better able to reduce their risk. Cars are just the beginning. In April, John Hancock Financial started offering discounts to policyholders who wear Fitbits or other personal health devices. More steps lead to higher discounts.
The Model Applies Broadly
For decades, vendors have offered willing participants freebies for their opinions. I recently provided my coffee preferences and some demographic data in exchange for free airport Wi-Fi. This was entirely voluntary, as I was given the option to pay instead. But I chose to get my free Wi-Fi, and one or more vendors gained some customer insights, although to be honest I don’t buy enough coffee to merit close study.
Loyalty cards of all types have the same premise. Any financial services or retail company can apply the model to their customers: Let us understand you better and we will serve you better.
There is an argument that all of this feeds the larger problem. Consumers are losing their privacy, and it’s less of a choice each day as large companies essentially force customers to forfeit their data to play. We all need to surrender our social security numbers and tax records to get loans, for example. “You don’t need to be a conspiracy theorist to foresee a Faustian bargain — consent to a totally monitored world — emerging from these trends,” writes UC Berkeley researcher James Rule in a recent Op-Ed piece in the Los Angeles Times. (Disclosure: I received a graduate degree from UC Berkeley.)
But I agree with Alistair Croll: Nobody should know more about your life than you do. And companies that practice this philosophy will win in the next decade.