Consumer Positions on Data Collection and Use
IndustryView | 2014
Software Advice recently conducted a survey that found nearly 75 percent of respondents are uncomfortable with companies collecting their personal data for use. This survey also found, however, that people are more willing to share data when companies are transparent about what they’re collecting and why—especially if this data will be used to the individual’s benefit.
To gain further insight on this topic, we decided to conduct another survey about respondents’ feelings on data collection. This time, however, we focused on just three categories in particular: medical, employee and financial data. Here, we present our most important findings.
When asked about their feelings on sharing personal medical data with doctors and other health organizations, respondents were almost evenly split. Thirty-three percent of respondents felt either “very” or “somewhat” comfortable doing so, while another 33 percent felt “somewhat” or “very” uncomfortable sharing such data. Meanwhile, the remaining 34 percent did not have an opinion regarding the collection of such data.
Dr. Sushil Duddempudi, MD, the director of interventional endoscopy at The Brooklyn Hospital Center in Brooklyn, New York, says that patient distrust is primarily aimed at how insurance companies collect and use personal medical data. “Patients tend to be more honest with their doctors,” he notes.
Digging in deeper, we found that opinions about the collection and use of medical data remain polarized even when the goal is to improve patients’ health. Thirty-six percent of respondents felt either “very” or “somewhat” comfortable sharing personal medical data in this instance, while 35 percent felt either “somewhat” or “very” uncomfortable doing so. The remaining 29 percent did not have an opinion.
This polarity suggests there is no general consensus on the public’s feelings about sharing personal health-based information. While Dr. Duddempudi believes that “the sharing of information leads to better healthcare,” he says this improved care comes at the cost of patients having no direct control over how their health insurance provider uses their personal data.
To reduce this polarity, Dr. Duddempudi observes, the relationship between patients and insurance providers must become more transparent: providers need to clearly disclose how personal data is being used, and patients should be given the option of whether or not they want to share this data at all.
The next category we surveyed respondents on, the collection of personal financial data, revealed much lower comfort levels. Just 19 percent of our sample said they felt “very” or “somewhat” comfortable sharing personal data with financial organizations, banks or investment brokers, while 48 percent felt either “very” or “somewhat” uncomfortable doing so. The remaining 33 percent did not have an opinion.
Steve Kwiatkowski, president of Legacy Springs Advisors, LLC, a financial investment advisory firm based in Austin, Texas, attributes this reluctance to “fear of financial organizations and banks selling personal data to institutions such as insurance agencies.”
When respondents were asked about their comfort level if their data was collected to help them make more profitable investments, however, there was a 13 percent shift: 32 percent said they’d feel either “very” or “somewhat” comfortable with this, while 20 percent said they wouldn’t. The remaining 33 percent of respondents didn’t have an opinion.
These results aren’t all that surprising; investors obviously want to maximize their return on their investments, and thus may be more likely to share personal information if doing so results in financial gains.
Kwiatkowski notes that people tend to have greater trust in investment professionals when relationships have been established between both parties, especially through “face-to-face interactions.”
When there’s a name attached to a face and ongoing rapport has been established, he explains, information sharing becomes more natural. This trust is further strengthened when the customer believes the financial party they’re interacting with has their best interests at heart and is looking to improve the value of their investments.
Another way to increase trust is to make sure customers are aware of the strict rules financial institutions must abide by when it comes to sharing their data. According to Kwiatkowski, his company, like all financial institutions, is “bound by strict regulations by the SEC [Securities and Exchange Commission], and cannot disclose any personal data whatsoever pertaining to their clients with unauthorized parties.”
The third category we surveyed respondents on was the use of work-related personal data. Here, the results were the most negative: only 25 percent of respondents felt either “very” or “somewhat” comfortable sharing such data with their employer, while 49 percent felt either “very” or “somewhat” uncomfortable doing so.
AJ Meade, managing director of Cantaro Capital, LLC, a private equity firm based in Austin, TX, says transparency is important for employees to feel comfortable with employers collecting and using data. “When employees understand exactly why you want their personal data, they will become more comfortable with sharing it,” he explains.
We then asked respondents how they felt about sharing personal data with employers if it would be used to improve work conditions. Here, the results were slightly more positive: 30 percent said they’d feel either “very” or “somewhat” comfortable, while 45 percent said they’d still feel either “very” or “somewhat” uncomfortable.
To help improve comfort and trust levels, Meade says employers should make it clear to employees when collecting their data is in their best interest. For example, he says, “Employers can provide past examples of instances when they have used employee data to improve things such as employee benefits, compensation, etc.”
Employers should also inform employees which data they want to collect and why, explain the process they’ll use to collect the data and how it will be processed. Employers should also share with employees the results they obtained and inform them of the workplace benefits this data will lead to, once they’ve been determined.
Next, we decided to take a closer look at the data broken down by age. We found that both older respondents (age 45 and up) and younger (under 45) had similar feelings about the use of their personal data: 27 percent of those under 45 were comfortable with data collection, compared to 25 percent of those 45 and up.
However, we found that younger respondents were more likely to feel comfortable sharing their data if there is a clear benefit to doing so. When data is used for their benefit, 28 percent of respondents age 45 and older said they were “somewhat” or “very” comfortable sharing data; a mere 3 percent difference from the first chart.
By contrast, 39 percent of respondents under 45 said they felt “somewhat” or “very” comfortable sharing data if it’s used to their benefit; a 12 percent difference.
Ayanna Telfort, vice president and group account supervisor at Saatchi & Saatchi Wellness, a global communications and advertising agency, says the generational gap between these groups of respondents accounts for different feelings about data collection.
“Data sharing is such a huge part of the lives of young customers, as it’s something they do almost every day,” she says. “For older customers, it’s more of a means to an end.” Furthermore, Telfort adds that younger customers may not have yet been subject to the unauthorized use or sharing of their personal data due to data breaches that have affected card holders, and are thus more likely to see data collection as being beneficial.
Older customers, she says, are often “nervous about their information being further shared” from company to company.
Having seen how widely news of a poor customer experience can spread—and how this news affects the public’s view of the company behind it—it’s clear why companies should be mindful of how they manage touchpoints. But touchpoint management is often overshadowed by other business goals, such as retaining customers.
It’s interesting to note that a considerable percentage of respondents on our sample didn't have an opinion either way for the questions we surveyed them on. It seems a decent chunk of individuals are still undecided on how they feel about sharing their personal data with organizations, which means their opinion can likely be swayed in one direction or the other, depending on their experiences with data collection in the future.
Kwiatkowski points out that there are ongoing efforts to safeguard personal data, given how much of it is stored online and potentially at risk, which will continue to help alleviate fears. The next step, he says, is for Congress to “strengthen the laws to forbid the selling or sharing of personal information,” as this will increase the likelihood that individuals will share their personal medical, employee or financial data with organizations so it can be used in beneficial ways.
To find the data in this report, we conducted an online survey of six questions, and gathered 2,324 responses from randomly selected adults within the U.S. We worded the questions to ensure that each respondent fully understood their meaning and the topic at hand.