On 25 May 2018, we crossed the long-awaited goal when the General Data Protection Regulation (GDPR) entered into force and this regulation ensures that consumers will have better control over how their companies handle their personal information provided to them.
For many companies, data processing regulation is a major burden because its implementation costs and will cost millions of euros to large companies. However, some of them may have looked beyond this regulation and have begun to think about how to create innovative and profitable business models that have not been possible so far.
With the loss of total control over current and historical consumer data, the data governance will return them back to customers and organizations will have to act so that they can only be controlled as a reward for trust. In view of the importance of personal data in offering products and services, they can become a new battlefield for acquiring new or important customers.
For example, we can take a renewal of insurance contracts. For years, large insurers have relied on lengthy notice periods and unclear comparative procedures that have discouraged customers from changing insurance companies at the end of anniversary of contract and have been able to realize their profits because of their simple renewal and prolongation. However, thanks to GDPR, consumers can simply ask their existing insurers to pass on their data to a competitor, so clicking on a single button may lose their key competitive advantage.
If one wants to take advantage of this opportunity, households or small businesses in all sectors should do two things. First, they have to convince consumers that they are a trusted manager of their data. Being a well-known and recognized brand helps, but companies also have to proactively communicate their privacy and security protection measures and explain how and by whom data are used. But acquiring customer data is only a basic prerequisite for any organization to perform its services or offer products to that consumer.
As soon as GDPR begins to be valid, consumers will increasingly become aware of value of information about them and will expect to receive an appropriate reward.
Secondly, the consumer sector should create truly trustworthy and convincing offers of products and services based on provided personal data. As soon as GDPR begins to be valid, consumers will increasingly become aware of value of information about them and will expect to receive an appropriate reward. It may be better user control, appropriate additional services or newly designed products. Those who will be able to motivate consumers to share more personal data will also be able to create more interesting and attractive offers that will attract more customers and gain more user-friendly data.
These introductory suggestions are first steps to using GDPR as a competitive advantage. However, this can also be used in other ways eg. to create new but potentially disturbing business offers. What if a trusted retailer or business organization will offer customers, for example, a signature or personal certificate service? With the consent of the customer, they could collect personal data from multiple sources, including other retailers, banks, insurance companies, telecommunication operators, social media or portable devices. Such services would save customers from filling in the forms and allow them to obtain more appropriate products and services without having to look at individual service providers or fear that their basic personal data might be misused.
Changes brought by GDPR will not happen overnight as education and consumer education will take time to create them. But those who are looking forward to the future can quickly expand rapidly, invent new services and seize opportunities, unlike those for which GDPR will become just another in a row of boring rules.