Privacy tech: the secret advantage to winning the “AI Race”

Photo Credit: kkssr | Shutterstock

Michael Ingrassia, President and General Counsel of Truata unveils the secrets to winning the AI race, and why EU data privacy laws could actually be our secret weapon to overtaking the rest of the world.

The AI race is on and companies around the world are competing for a global advantage in artificial intelligence-based innovation. Many experts have written off European companies in this race, based on the assumption that they will fall behind due to Europe’s perceived stricter attitudes and laws on data privacy. But is this true? Or could this privacy focused attitude actually be a secret weapon?

Rather than hobbling companies, Europe’s data protection regulation, the GDPR, has in fact given businesses across the continent a secret advantage when it comes to embracing the power and opportunities that AI presents. The values that companies across Europe uphold are set to enhance and accelerate new, privacy enhancing ways to analyse and manage data. This established fluency in using privacy-enhanced analytics will enable European companies to extract value from data while retaining the trust, respect and loyalty of their consumers.

Unsurprisingly, the US and China have a head start in the AI race due to their large populations and flexible privacy laws. However, in the long term, overstepping privacy boundaries is likely to cause a backlash as consumers are becoming far more aware of their digital footprints and the value of their data. It is the typical tale of the tortoise and the hare – how safe and steady will win the race (in this case respecting consumers’ right to privacy will enable success in AI, rather than stifling it).

In fact, if the US and China assume a “digital creepiness” stance, whereby companies become more aggressive in the use of the digital footprints of consumers to continuously target them, many consumers will likely turn to European companies. These consumers will be willing to share more of their valuable data with European companies, under the guidelines of stricter data protection laws, than they would with companies who don’t demonstrate they care about their privacy. As seen in our Global Consumer State of Mind Report, European privacy values herald a globalising trend towards consumer concern with respect to privacy – concerns that are already leading to laws that emulate the GDPR. Ultimately, businesses risk losing out on huge opportunities by jumping the gun on using consumers’ data by ignoring the value consumers place on their privacy rights with respect to their data.

Digital creepiness and consumer distrust

When brands choose to ignore consumer attitudes towards privacy and responsible data practices, they create an environment of distrust. Now that consumers are using online services more than ever before, they demand a tailored experience. However, they don’t want to sacrifice their privacy for personalisation. In fact, nearly two thirds (62%) of UK consumers say it’s creepy when a brand sends them unexpected personalised offers, as they feel it knows too much information about them. In addition, 54% go as far as to say such personalisation is an invasion of their privacy, and it’s deterring them from shopping with retailers who behave in this manner.

Though it is understandable that brands want to leverage this accelerated move to online and develop their services to keep ahead of the competition, there is a fine line between being helpful and being creepy. To get the most out of data analytics and reassure consumers that their privacy is being upheld, brands must act with trust and transparency to build consumer loyalty and remain profitable.

Privacy recklessness causes data starvation

When companies are reckless with data, consumers will be wary of sharing any personal details with them in the future. The COVID-19 pandemic, and its impact on accelerating private and public sector use of personal data, has helped throw the value of personal data into the limelight.  Consumers are now more aware of the value of their data as well as the risks associated with sharing it. For a brand, innovations in AI are dependent on consumer data and if that data is misused, they will end up being starved of the very data they need to advance their AI capabilities and thereby obtain value-generating insights.

Trustworthy brands are far more likely to be profitable in the age of digital privacy. Our research highlights this as 63% of global consumers would stop using a brand if they felt it didn’t demonstrate that it cares about being responsible with their personal data. Even if consumers have agreed to share their data, they are still aware of brands using it in ways they haven’t consented to. Therefore, brands who approach the use of personal data responsibly will reap the rewards as 58% of global consumers agree they would spend more money with a brand they trust with their personal data. When European companies prove they are handling personal data in an ethical and law-abiding way, consumers will entrust more data to them. This will give them greater access to data, which will enhance and enrich their AI and machine-learning operations, giving them a hidden advantage over their privacy reckless competitors.

The European advantage

While data privacy restrictions may seem like a disadvantage, trust and transparency are the key to success and so the restrictions that European companies face will actually help them in the long term. Consumers now want companies to respect their privacy and the privacy restrictions that govern European companies’ behaviour ensure that they demonstrate this level of respect for their consumers’ privacy. These restrictions are resulting in companies investing in privacy-enhancing technologies, not only because it is the right thing to do, but also because it is clearly a great investment in terms of growth for the company.

In many ways, these constraints provide advantages when it comes to AI as they will help drive innovations through data analytics. European companies are ahead of the curve in learning to do more valuable data analytics with less data, meaning they are already becoming more creative in finding ways to unlock the value of the data they do hold. By applying European values and conditions to enhance AI-based innovation, companies can impact the way data is used for AI purposes globally. This could help both companies and people appreciate and embrace the benefits of using data mindfully and productively.

Prioritise consumer trust or lose out

Consumers around the world now expect changes to be made by businesses and regulators alike to ensure they have control of their digital selves in order to prevent their data from being misused. The value of data is already immense and provides enormous potential for data-driven organisations – it has now also become the key in developing AI based technologies. Businesses, however, must ensure they are not abandoning the human behind the data, as their brands and their futures depend on those people.

Companies that are desperate to innovate through their consumers’ data, regardless of the impact on those consumers’ privacy rights, may achieve more immediate insights. But they will eventually find themselves starved and abandoned if they misuse that data – first starved of data and eventually abandoned by their customers. In today’s climate, no business can afford to lose customer data, let alone customers, so heeding the those customers’ cry for control over their digital selves will provide a huge opportunity to gain consumer trust and secure brand loyalty.


Michael Ingrassia

Michael Ingrassia joined Trūata as President and General Counsel from Mastercard International, where he was the Senior Managing Counsel for Strategic Transactions and Global Mergers and Acq

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