Arguably the digital era has given rise to a consumer culture that has completely changed the way businesses and customers interact. What was once an extremely standardized and cheap experience has changed into one that is costly, with consumers expecting personalized, and tailored preferences, because, for the first time, it is achievable.
This is why our digital data has become crucial for both long term growth and scalability of organizations and businesses; it is fast becoming a highly valuable commodity in the field of commerce. This ‘data universe’ has become one of the most crucial aspects of the modern world as internet accessibility rapidly expands and ‘smart’ technologies increase the amount of data that is available to mine. The effects of personal data usage on a company’s success can be seen first-hand, with the world’s most prosperous companies being the biggest collectors and administrators of data.
A company’s ability to understand, and utilize the abundance of data available will distinguish the winners from the losers in an environment dominated by preference and choice. It is therefore vital that businesses begin to treat personal data as an important revenue generator and not something to be stored. However, for businesses to gain benefits from their data, it is first important to understand and treat their data as a commodity.
On its own, data has no inherent value, but its potential becomes obvious once it is ‘spent’. It can be equated in the way the USD ensures its potential value is realized by making it accessible and having items to spend it on. Data is the same in that its value can only be appreciated when it is readily available, like in a holding place such as a wallet, for when someone is ready to use it. Just like money, data delivers or ‘spent’ when it can present a recommendation or personalization for businesses and creates real value – hence all of the ‘free services’ that exist which are paid for by selling personal information to interested parties, such as advertisers.
New age consumerism and what data plays
As the influence of personal data usage is quickly evolving, so is the nature of consumerism. It is shifting from being focused on the masses to be an individualized experience, where customers expect their consumer experience to be personalized and available across the many screens in their lives.
With more than half of connected consumers globally wanting to be distinct from the rest, traditional business strategies must change if businesses want to stay competitive and relevant. It is also important to note that the majority of those who hold this sentiment are Gen Z, and therefore this desire for a different consumer experience will not subside anytime soon.
‘Payments data’ specifically provide a mix of financial, behavioral, and transaction data, gathered by payment services providers while providing services to end-users. The people and organizations that use payment systems are adapting to the times by taking major strides towards non-cash methods, all of which create payments data. Therefore, as the number of electronic payments has increased, so has the amount of personal data. The way payment data is collected, used and shared offers major opportunities for payment service providers. Within e-commerce, data has undoubtedly become the center of customer management systems and security innovations.
Power of tech
Additionally, the financial technology industry is, by and large, powered by smart technology that is in sync with personal payment data. Whether it is about available funds in an account or data that validates someone’s identity to make a purchase, money, at some basic level, it is also data. In an industry such as traditional banking where hardly anything has changed over several decades, particularly at the infrastructure level, new technology and data connections have the ability to increase services, innovate and add value for clients exponentially.
Despite the significant shift towards a data-rich society and the expectation of personalized consumer experience, it is important to remember that not all consumers welcome the methods used to harvest the data that fuels these experiences. Around half of globally connected consumers see targeted advertisements generated from online searches and purchasing history as an invasion of privacy. In the EU especially, it is important to be aware of the existing privacy regulations such as GDPR that give more control over how this necessary personal data is used and collected. It is vital to always be aware and up to date on GDPR regulations to avoid the severe consequences involved with violations.
Overall, it can be argued that digital data has emerged as the most valuable commodity in the world. For it to be useful, it must be ethically extracted, smartly refined and safely monetized. In the same way as vital commodities such as gold and oil have generated growth and enriched nations, the next wave of growth will could be based on data.