The effective and trusted deployment of personal data could be a boon to consumers and a source of massive growth in the European economy, but only if public and private sector organizations ensure that consumers are aware of the benefits while assuring adequate privacy controls, according to a new study, “The Value of Our Digital Identity,” conducted by The Boston Consulting Group, which included a poll of 3,000 European consumers.
The report quantifies for the first time the current and potential economic value of a person’s “digital identity” or the sum of all digitally available information about an individual—everything from what consumers reveal about themselves on social media to data produced by online transactions and other sources.
The economic value of applications built on the use of digital identity for both public- and private-sector organizations is expected to reach Ã¢â€šÂ¬330 billion in Europe by 2020, according to the report. BCG estimates that the consumer benefit will be more than double the organizational value—Ã¢â€šÂ¬670 billion annually by 2020—mainly stemming from reduced prices through data-driven cost synergies, time savings through self-service transactions, and the high value individuals place on free online services and mobile apps, supported at least in part by the sharing of their personal data.
A survey of the actual data-sharing behaviors of over 3,000 consumers conducted for the report focused on the factors that spur, and hinder, the sharing of data:
- 88% of respondents consider organizations from at least one industry a threat to their privacy, but very few adapted their behavior.
- Consumers with higher than average awareness of data uses require 26% more benefit in return for sharing their data.
- Few individuals are in control of their digital identity. Just 10% of respondents had ever done six or more out of eight common privacy-protecting activities (e.g., change privacy settings, opt in to/out of data use).
- Consumers who are able to manage their privacy are up to 52% more willing to share than those who aren’t.
- Trust differs per sector: Consumers are on average 30% more willing to share data with e-commerce companies, cable operators, and automobile manufacturers than with Web 2.0 communities.
- The “right to be forgotten” has a small but consistently positive impact on the willingness to share, increasing it by 10% to 18%.
The report concludes that, in order to unlock the full value potential, business and political leaders need to embrace a new paradigm for digital identity applications:
- Benefits. Most consumers are willing to share their personal data, given sufficient awareness on the benefits of digital identity applications and the implications for data collection and usage.
- Responsibility. Personal data needs to be recognized as a highly valuable asset, requiring an adequately high level of security, and a limitation to the least sensitive data for the targeted use.
- Transparency. By being open and clear about their data processes, organizations effectively mitigate confidence risks and attract more informed customers to their platforms and applications.
- Control. Individuals’ preferences regarding data sharing differ widely. Easy-to-use options and controls allow individuals to adapt their sharing to their specific needs.
The full report can be read over here.