Although consumers have a wide range of attitudes toward data privacy, the vast majority are calling for organizations to be more transparent about how they handle customer information, according to a July 2018 survey from the Direct Marketing Association.

Previous research has shown that many companies are not doing enough to communicate and clarify their data-handling policies to customers. Given these findings, what practices can organizations adopt to be more upfront with users and build customer trust?

How Important Is Data Privacy to Consumers?

The Direct Marketing Association survey sorted respondents into three categories:

  1. Data pragmatists (51 percent): Those who are willing to share their data as long as there is a clear benefit.
  2. Data unconcerned (26 percent): Those who don’t care how or why their data is used.
  3. Data fundamentalists (23 percent): Those who refuse to share their personal data under any circumstances.

It’s not just fundamentalists who see room for improvement when it comes to organizations’ data-handling practices. Eighty-two percent of survey respondents said companies should develop a flexible privacy policy — while 84 percent said they should simplify their terms and conditions. Most tellingly, 86 percent said organizations should be more transparent with users about how they engage with customer data.

There Is No Digital Trust Without Transparency

The results of a May 2018 study from Ranking Digital Rights (RDR), Ranking Digital Rights 2018 Corporate Accountability Index, suggest that consumers’ demands for more transparency are justified. Not one of the 22 internet, mobile and telecommunications companies surveyed for the study earned a privacy score higher than 63 percent, indicating that most organizations fail to disclose enough information about data privacy to customers.

Transparency is often a critical factor for consumers when deciding whether to establish digital trust with a company or service provider. According to IBM CEO Ginni Rometty, organizations can and should work to improve their openness by being clear about what they’re doing with users’ data. Those efforts, she said, should originate from companies themselves and not from government legislation.

“This is better for companies to self-regulate,” Rometty told CNBC in March 2018. “Every company has to be very clear about their data principals — opt in, opt out. You have to be very clear and then very clear about how you steward security.”

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