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The new General Data Protection Regulation (GDPR) will come into full force from May 25 next year, with new compliance demands likely to lead to increased user scrutiny, and related costs. New research shows that when it comes to data handling, banks are the UK’s most trusted service providers while TV, phone and internet providers are regarded with more suspicion,
Trust remains a key aspect of the business environment. Increased concern among consumers and governments about the uses, and potential abuses, of personal data has, in Europe, created awareness among consumers and new EC rules, which allow users insight into what data on them is held by companies, and how it is used, among other conditions. The rules, known as the General Data Protection Regulation (GDPR), will come into full effect next year, when enforcement begins – with failure to comply, potentially costly, at $20 million or 4% of global revenues, depending on which is larger.
As businesses and organisations rush to become compliant with the GDPR, attention is being paid to consumers’ concerns about how their data is being used by various organisations. Higher levels of concern could, for instance, see increased information requests from users, and additional compliance costs for companies.
A study by Baringa Partners, which surveyed more than 2,000 UK adults, showed that banks are the most trusted segment (77% of respondents) to handle their personal data, followed by insurers (62%), energy companies (59%) and TV, phone and internet providers (58%). However, concerns may increase when word of mouth from customers into how their data is being leveraged, reaches other customers of various services.
Commenting on the research, Daniel Golding, a Director at Baringa, said, “Although trust has been recovering in recent years, banks dug themselves a deep hole during the financial crisis and a reputation for untrustworthiness continues to follow them around. It’s surprising then that people place more faith in banks than they do in energy or telecoms and media companies when it comes to handling personal data. It’s an important reminder that trust hinges on all sorts of complex relationships and is subject to change. It’s also a warning to less trusted sectors that customers may judge them more harshly.”
Banks are considerably more trusted, which is partly due to their long-stranding tradition for their air of integrity. Responses included 'they are an established brand/have a strong reputation’ (44%), ‘they have been my provider for a long time’ (29%). Finally, banks are, already, relatively transparent, or seemingly so, about the data they hold on their customers (55%), compared to insurers, energy companies and other peers (46%).
Golding added, “Bank customers tend to stick, whereas the churn rate is higher for energy companies and internet providers. But, although long - standing reputations and relationships are important, our research conveys a strong message that transparency and communication matter a great deal too. Here, companies aren’t doing very well: a third of people (33%) currently receive no communication whatsoever about the personal data held on them.”
Related: How to prepare for Europe's new privacy regulation GDPR.
