Harry Keen, CEO and co-founder of Hazy, on whether data really is the new fur.

A lot has changed since Tesco Clubcard-architect Clive Humby declared data as ‘the new oil’, back in 2006. It was a premonition for a decade of growth across the tech sector. Data, rightly or wrongly, has functioned as fuel for a generation of tech giants, spawning the world’s first trillion dollar company, along with numerous apps, services, startups and unicorns.

Yet in recent months, we’ve seen a shocking succession of data handling scandals at some of the globe’s largest companies. The general public appears to have woken up to the disturbing possibility that their personal data has been used for purposes far beyond what we should consider reasonable. Consequently, 2018 has seen a marked shift in public opinion, demonstrated most clearly by Facebook’s first ever decrease in the rate of user growth.

Data handling has become an ethical consideration

Perhaps most critically for the business community, it’s a shift in sentiment that goes far beyond the legal requirements imposed by GDPR. It is likely, we think, that 2018 will be seen as a pivotal moment in the cultural history of the internet. There is an element of paradise lost – the carefree oversharing of opinions, photographs and personal messages that characterised the early days of social media may well be gone forever.

Concerns over data, privacy and GDPR have already impacted giants Facebook and Twitter on their bottom line, with Facebook suffering a humiliating and eye watering $120 billion crash in value in the wake of revelations that user growth has slowed. US media outlet CNBC was quick to call ‘peak social’, with GDPR regulation blamed by both companies.

The myriad scandals and almost constant media attention has meant that our cultural view of data has changed dramatically and irreversibly. Once we shared endless details about ourselves freely and without fear. For the companies that used this data it really was akin to oil fuelling their growth. The best part, was that unlike oil this data was given to them freely by unwitting users desperate to be part of the new social internet.

But thankfully this has changed.

Companies should now view data as the ‘new fur’ rather than the ‘new oil’. Just as the fashion industry had to quickly change its practises in the 80s and 90s for its prolific use of animal fur, today’s private companies have found themselves under scrutiny for not handling consumer data in an ethical and responsible manner.

Data handling now transcends legal or regulatory obligations, with consensus building that data privacy is an issue bound not only by rules and laws, but by morality and ethics, far beyond what is currently legally demanded of businesses. Data handling is a reputational risk as well as a business risk. I would even go as far as to say that, for most businesses, the incorrect handling of data has become an existential risk. It’s too important an issue to get wrong.

Beyond GDPR

GDPR deadline day on 25 May this year saw an almost comical tide of companies scrambling for last-minute compliance. While many organisations seemed unprepared, the introduction of GDPR has done well to establish a new baseline for what consumers expect from companies that handle their personal data.

GDPR presented companies with the opportunity to strive towards more ethical data handling not because they have to but because it’s the right thing to do. And we are now starting to see companies touting their data handling credentials as a way of building trust with consumers.

So, are things getting better?

In July, the ICO reported a massive increase in the number of self-reported data security incidents, which have increased fivefold since GDPR was introduced. This doesn’t necessarily mean that there has been an increase in data breaches, but rather that they are being reported faster and in larger numbers. Far from concerning, I believe that this is a reassuring sign that companies are beginning to take data privacy seriously.

One of the positive effects of GDPR is that cyber security and data ethics are now at the heart of every business, while transparency and accountability must be paramount. As companies work towards bringing their data practises in line with – or even besting – their customers’ expectations, this cultural trend will only continue to grow. And if your company isn’t on board, then you run the risk of being left behind.

Companies should no longer seek to abide by data laws due to a risk of being fined, but because it’s good business. It is undeniably a net-positive that 2018’s data scandals will have a lasting effect on the industry. Fast forward ten years and we’ll look back in horror at how we used to think it was acceptable to play fast and loose with other people’s data. Just as we do now about wearing fur.