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Artificial Intelligence Technology Open Mic

Data privacy: Compliance tax or existential business necessity?

By Oren Kaniel, CEO



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June 26, 2024 | 5 min read

Oren Kaniel, CEO of AppsFlyer, shares why in the era of AI, data privacy should be viewed as a strategic investment for marketers and businesses rather than a compliance requirement.

As artificial intelligence (AI) took the main stage with the announcement of Apple Intelligence at WWDC24, OpenAI’s new releases, and the introduction of various new models, data privacy concerns are becoming bigger than ever. Companies are facing existential threats, trying to balance AI’s need for more data, and complying with data regulations.

Data privacy is often seen as a necessary evil — a compliance ‘tax’ that companies must pay to adhere to regulations and protect consumer privacy. However, this narrow view overlooks a critical aspect: data privacy is a strategic investment essential for the very survival of a company.

The common misconception is that data privacy is merely about compliance, a box to check off to avoid legal repercussions. In reality, the challenge is far greater and more existential. Consumer data has emerged as the true competitive advantage. If not adequately protected, this data can be exploited by competitors, threatening the company's very existence.

The competitive edge of consumer data

Consider this: in any industry, a small percentage of customers are the primary revenue drivers — whether in apps, games, ecommerce, or travel. These high-value customers are not just important; they are crucial for sustained business success. If their data falls into the hands of competitors, they can target these customers through various networks and social platforms, offering compelling alternatives that can lead to churn — often in ways that are hard to detect. This exploitation can occur directly or indirectly, and the impact on the company can be devastating.

As generative AI (genAI) becomes more prevalent and incorporated into our mobile devices, we’re looking at a future where personalized interactions are the norm. It will be what sets incredible companies apart.

Apple clearly shared this vision given their presentation at WWDC24. Brands will increasingly create experiences that are deeply personalized, leveraging AI to maximize their user data and meet users' expectations of relevance and convenience. However, they could quickly lose this edge if they don’t have proper protection and control of their data. Without proper data privacy measures, a company might find itself facing unexpected competition. 

The reasons for customer churn could be misattributed to product flaws, marketing inefficiencies, or innovation pace, while the real issue lies in the exploitation of unprotected consumer data.

The solution: data privacy as a strategic investment

Data privacy should be viewed not just as a compliance requirement but as a strategic investment. Protecting consumer data is not just about meeting regulatory requirements; it’s about safeguarding the company's most valuable asset from being used against it. Companies must ensure they know where their consumer data is stored and processed, who has access to it, and whether the companies they use for data storage and measurement have conflicting interests. 

A key question is: do these companies engage in user profiling, run ad networks, or have data packaging and data selling businesses? Understanding these factors is crucial for maintaining control over your data and protecting it from exploitation.

Privacy-enhancing technologies and alignment

Adopting privacy-enhancing technologies and ensuring alignment between compliance teams, legal departments, data privacy teams, and business strategies is essential. While each department has its own focus, the ultimate goal is to protect customer data. This alignment is crucial for maintaining customer loyalty and trust, which are critical for long-term success.

Data collaboration is also essential for enhancing your customers’ experience, marketing, innovation, and product development. This creates a conflict: on one hand, you need to keep data private for business reasons, but on the other hand, data collaboration is critical for business growth.

This problem can be tackled by providing solutions and tools that enable companies to collaborate on their data for various purposes—such as measurement, activation, data clean rooms, and innovation—while maintaining stringent privacy standards. This approach ensures that businesses can leverage their data collaboratively without compromising on privacy nor providing data on their customers, allowing businesses to harness powerful AI capabilities without compromising trust.

This means it's also important to choose partners and tools that are completely independent and unbiased, with no hidden interest when it comes to your most valuable asset - your customers' data. This neutrality ensures that your clients' data remains secure, reinforcing your commitment to data privacy and integrity.

The bottom line is, data privacy is not just about compliance; it's about protecting the core of your competitive advantage. As AI continues to democratize technology and innovation, the strategic importance of data privacy cannot be overstated. Companies must recognize that investing in robust data privacy measures is essential for safeguarding their consumer data, maintaining their competitive edge, and ensuring their long-term viability in the market.

By shifting the perception of data privacy from a mere compliance requirement to a strategic business imperative, companies can better protect their most valuable asset and thrive in an increasingly competitive landscape.

Artificial Intelligence Technology Open Mic


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