For some time, there’s been a tug of war between consumers’ insistence on keeping their personal data private and businesses’ desire to access that data for competitive advantage. But the tension could be easing, according to a new study by Celent.
The study indicates consumer attitudes toward their data are changing, opening the door for financial institutions who want to use that data. Based on an online survey of 2,648 consumers in the U.S. and the United Kingdom, the report identifies specific areas where a data sharing value proposition will generate loyalty and discusses how insurers should approach projects that would benefit from shared data.
According to Celent, 77 percent of the survey respondents indicated they would willing to share data about themselves; 4 percent described themselves as “active, willing data sharers,” while 73 percent said they are selective when it comes to data sharing. Only 23 percent said they are focused on maintaining their personal privacy. This, Celent points out, presents plenty of opportunity for banks and insurers and other financial institutions, which may have assumed to this point that their customers would not even consider an active data sharing model.
"Of course there are privacy concerns," Celent CEO Craig Weber said. "But consumers in our research showed a surprising level of trust in banks and insurance companies. You get the sense they are waiting for someone to explain the consumer benefits of data sharing, in practical terms. We think the first generation of firms that does this well will generate immediate leverage."
Celent analyzed the findings to identify factors that predispose customers towards data sharing. These are represented in the graph below. The dark bar depicts responses from all respondents combined and serves as as a baseline; the other bars show the net impact of two additional factors—belonging to a grocery store loyalty club, and self-classifying as extremely technically savvy.
“For virtually every category of data to be shared, the application of these two factors raised the apparent willingness of respondents to share data by as much as five percentage points,” the report authors wrote.
The study also found that trust in banks and insurers is relatively high—19 percent of respondents have high trust levels regarding insurers and 35 percent have high trust levels in banks—despite rising concerns about data privacy resulting from much-publicized retail data breaches and revelations about government data collection programs.
Available now, the report can be purchased on Celent’s website.
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