Businesses must realise that consumers are starting to demand more control over their personal data and act accordingly or they will be “destroyed” by innovative newcomers.
That’s the view of Amit Pau, managing director of Ariadne Capital, an investment and advisory firm specialising in tech start-ups. Speaking at an event organised by industry body the Mobile Enterprise Forum (MEF), Pau said that a new model is rapidly emerging.
“We’re on the cusp of a major, major game changer and that’s called the personal economy,” Pau said.
He continued: “It’s my data and I should accrue economic value for that data. It should be my legal asset. Those brands that abuse that and do not actually embrace the fact that it’s my data and that I need to accrue economic value will no longer be in business.”
It’s not so much about privacy, he said, but rather giving consumers fair exchange for the data they give up and control over how it is used.
“Google are geniuses. They have built a business with a market cap of $458bn all around harnessing my data to drive their business model and drive shareholder value. But is that fair? Do we as consumers get any economic benefit beyond free search and being stalked online? Is that a sustainable business model in the mid- to long term? I suggest no.”
As indicators of how things are changing Pau pointed to the use of ad-blockers, which is increasing by more than 40 per cent year on year, and also the growing numbers who refuse to use their Facebook credentials to login to other sites, and he quoted a figure from Pew Research that 91 per cent of consumers say they want more control over their personal data.
Regulators, too, are becoming more ready to issue fines, as was the case with US cable company Comcast, which was recently fined $33m after a breach and ordered to pay compensation of $100 to each of 75,000 users who had paid the company extra to keep their data safe and private. However, Pau described this compensation as “offensive” and predicted that the levels would soon increase as consumers start to put a monetary value on their personal data.
The personal economy, Pau suggested, will revolve largely around mobile devices.
“They are the remote controls for our lives. We are really at the start of this exponential data wave: 7.5 billion devices can be connected to 3.7 billion mobile users. We already know the shift to mobile is not just to browse, that 50 per cent of revenues again become from m-commerce versus e-commerce. The amount of data that will be collected is phenomenal.”
For mobile operators he suggested that in the “personal economy” identity-as-a-service is one way that they can “disrupt the disruptors”.
“ID as a service is a trillion and a half dollar market. The mobile operators and the mobile industry is at the heart of this. The mobile industry has such uniqueness, whether it’s authentication, security, geolocation data. They can really harness this, instead of abusing it, which is what the current tech giants have done, marketing that data for somebody else’s benefit. Wouldn’t it be great if the mobile operators shared that data not just for the economic upside for the consumer, but giving added value to real businesses?”
Privacy and personal data will be topic of discussion at our Enterprise Security & Risk Management Summit on 26 November. Registration is free for most delegates.