Increased customer data availability is presenting lucrative opportunities, but organisations wishing to capitalise on them must address rising privacy concerns and regulatory scrutiny, according to IDC.
The data analyst company says these companies must also build trusted data initiatives by increasing the capabilities required for digital trustworthiness. This can include expertise in privacy protection, data security, and conformance with regulatory/industry standards to master customer data.
As a result of the COVID-19 pandemic, many organisations are making new customer experience (CX) investments, particularly in data management and customer data platforms, to generate greater value out of customer data, improve resiliency, and accelerate growth, IDC says.
Leading CX organisations with better data and platform capabilities have shown to be better positioned to adapt to and take advantage of the opportunities from the COVID-19 pandemic, IDC says.
IDC APAC associate vice president of digital transformation, future of customers and consumers research, Daniel-Zoe Jimenez, says organisations look at CX technology vendors to bridge internal expertise gaps as they work to improve their data capabilities.
“In helping organisations to master data, technology vendors must bring expertise in privacy protection and customer data security to the table,” says Jimenez.
“In addition, vendors must add value through best practices in privacy and security policies and regulatory/industry standards that contribute to digital trustworthiness.
The study shows that both CX leaders and followers invest in customer data platforms to integrate and leverage data from multiple sources. However, many organisations still lack the integrated data infrastructure required to combine and harvest customer data from disparate data and technology silos within their walls.
For a significant portion of CX followers, data integration complexity and privacy protection requirements push them to leverage third-party sources using data management platforms instead of mining insights from first-party data.
The study further shows that most CX followers score low in digital trustworthiness partly because of the lack of expertise in privacy protection and security of customer data. Systems that host personally identifiable information (PII) are identified as one of the top high-risk areas for trustworthiness when conducting digital activities.
“For organisations to successfully extract exceptional value out of their data mines, they must overcome challenges in data integration and be able to enforce privacy protection of their customer data,” says IDC APAC senior research manager for future of customers and consumers research, Lawrence Cheok.
IDC says that by 2025, privacy will have been redefined as the value of data. Organisations will be providing loyalty services in exchange for consumer data, with 60% of consumers in developed APEJ countries participating.
As organisations embark on initiatives to trade value for customer data, they must concurrently address fundamentals of digital trustworthiness in privacy protection and data security to ensure the customers are willing to trade their information in exchange for value.
CX technology vendors that add value to privacy and data protection expertise will speed up organisations' time-to-market in CX initiatives and stand to differentiate, the data analyst firm says.