The end of the battle: privacy vs personalisation

Last week, Hazy CEO, Harry Keen, took part in a panel: The Ingredients to Balancing Consumer Privacy & Personalisation for Future Customer Loyalty at CDAO UK.

Customer awareness of data privacy and how their data is used is on the rise - as are the fines levied at companies in breach of privacy laws. In 2022, the total fines issued for data misuse rose by 54% to €831m. That trend has seen an increase each year since 2018 - a year that only saw nine fines. The consistent increase is set to continue with the EU Commission about to put even more pressure on regulators to enforce GDPR, which will undoubtedly mean larger and more frequent fines in the near and distant future.

As a result, enterprise firms are left with a big question: how should data be used in production to help transform a business, without risking misuse of customer data? Here, we look at how that can be achieved, but also why doing so is incredibly important.


The power of personalisation

There’s no denying that using data to personalise a customer’s service, product or experience is beneficial. In fact, presently, all enterprise firms rely on personalisation for their growth and retention marketing. That means any media company, research firm, telco business, or financial service corporation find that using data to personalise their offering is vital. 

These types of companies also lean heavily on personalisation for effective customer communications and enhanced customer experience. And now, customers are so used to personalised communications, that personalisation is almost mandatory - be it basic dynamic text fields with names in emails, Spotify wrapped, or algorithms that tailor services based on content with which a user engages.

To offer all this, those companies need data. 

However, while the world is becoming increasingly data-driven, it’s also becoming more regulated. As such, many companies are currently experiencing the subsequent trade-off between privacy and personalisation. To offer personalisation, you must hold relevant data. But that data is subject to privacy laws so strict, that remaining compliant is time-consuming and laborious. 

To cope, some companies are prioritising customer privacy in fear of fines and brand damage. As a result, they are sitting on their hands and doing nothing. That’s to the detriment of offering personalisation which could, in turn, maximise business outputs.

On the flip side, others are simply using data inappropriately and have thus been fined, with yet more to come in 2023. For example, Whatsapp was recently hit with a €5.5 million fine issued by The Irish Data Protection Commission (DPC).


How are businesses responding to this challenge?

Currently, many firms address data privacy by masking or anonymising it. Doing so, in their view, means they can use it ‘safely.’

Masking is a method of creating structurally similar but inauthentic versions of an organisation's data that can be used for purposes such as software testing and user training. The purpose is to protect the actual data while having a functional substitute for occasions when the real data is not required, such as generating dummy data for software development.

Data anonymisation is a set of processes and methods that can be applied to a dataset in order to ensure that the data it contains cannot be connected to an individual or entity from which the data comes.

These methods solve some of the issues of keeping data private. However, there are many downsides:

  • The quality of the data is degraded
  • They are slow, manual and expensive processes
  • Data can be easily re-identified (i.e. likely to be hacked).

The other approach many firms choose to follow is to use their data, but in an insufficiently anonymised or masked way. Firms doing this are in breach of data protection, which is why so many firms are currently facing fines. Since the beginning of 2023 alone, over 35 companies have been fined. Most notably, Meta was penalised to the tune of €390m for not being compliant with general data processing principles. 


What if there didn’t need to be a trade-off?

At Hazy, we know that synthetic data is not the perfect solution for every case, but it can (and does) provide valuable impact and insight without any privacy risk. 

Utilising it optimally allows for the generation of artificial data that contains no real data or customer information whilst preserving all the insight, patterns and correlations in the source data. As a result, synthetic data gives teams the tools they need to generate quality business intelligence to enhance customer experience and personalisation. In doing so, a company can give itself a competitive advantage.

With Hazy synthetic data, you’ll empower your teams to generate better analytics that can be shared safely between teams, leading to better decisions across your business.

Why be forced to choose between privacy and personalisation when you can have the best of both worlds?


For more information on the potential of synthetic data within your data strategy, get in touch.

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