Social media phenomenon TikTok was, until recently, touted for its uniqueness, advanced AI algorithms and user-friendliness, but data privacy concerns have unleashed panic amongst its user base all over the world.
Owned by Beijing-based internet company ByteDance, the app has come under scrutiny globally, particularly in countries like the US, Australia and Japan, and India has already banned the video sharing platform. Accused of harbouring and mishandling vast amounts of user data, TikTok has been described as a ‘national security risk’ by many—the White House included.
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The TikTok debacle highlights the repercussions of the data-driven world we inhabit. After all, while data exists, such threats will remain. A report by Risk Based Security has revealed that there were over 8.4 billion records stolen in the first quarter of 2020, as opposed to around 2.2 billion in the same quarter in 2019.
Data has revolutionised the business world
Data has helped replace intuition and ambiguity with research and certitude for years, and companies use it to increase productivity, identify opportunities, and create personalised experiences for customers.
Moreover, despite data privacy concerns, users are giving away more personal data. This privacy paradox often comes from a place of helplessness. For instance, several smartphone applications don’t function without access to your contacts or gallery.
Besides, users are benefiting from advances in data collection. Big data has made personalised promotions and recommendations possible to help users make smarter purchases. For example, Netflix presents personalised suggestions by adapting to viewers’ interests and viewing history. A Harvard Business School study found that data-driven decision making has numerous benefits for consumers, including giving them more confidence in their choices, making them more proactive and helping them save money.
Some organisations take personalisation a few notches higher by implementing it offline. For example, in 2017, Timberland placed a magic mirror—a virtual fitting room outside its store, allowing customers to try on clothes using augmented reality. In the process, the device accumulated useful data about its customers, aimed at improving future sales.
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Management consultants McKinsey stated in a 2019 report that personalisation is the future for marketing and clearly, data science is here to stay. As Geoffrey Moore says, “Without big data analytics, companies are blind and deaf.”
How much data is too much data?
Companies collect all kinds of user data, often ending up with swathes of unusable information, not only wasting resources but also making users suspicious. TikTok stands accused of collecting personal data, monitoring websites browsed by users, their location, phone model, operating system, as well as the way they type, and sending it to China. Consequently, it is essential to know why companies need data and its intended usage. For example, Uber has transitioned from collecting big data, to collecting small, right data. Today, all it asks you is where you are and where you need to go.
Entrepreneurs must be mindful and practise the following:
Prioritise sustainability over instant gratification: Today’s businesses have a lot to learn from the issues TikTok faced. It is paying the price for short-sightedness, a warning to other companies who may be hard-wired to want immediate results. However, misusing data for this instant gratification is worthless. Pursuing sustainable goals is key to attaining success in the business world.
Put data privacy at the centre: Preventing a data breach is much easier than recovering from one. As per IBM Security’s yearly report, the average cost of a data breach between August 2019 and April 2020 was $3.86 million USD.
Furthermore, consumer loyalty and trust, which takes years to build, can be shattered in seconds. What’s worse, cyber-attacks come with inescapable legal hitches that can cause severe setbacks for companies. These consequences are avoidable through data privacy measures like investing in IT resources, data encryption, and educating of employees. And while it is great for entrepreneurs to be one step ahead of internet fraudsters, being equipped to fight back is equally important.
Have an incident response plan in place: It is wrong for companies to assume that they’ll never be affected by a breach. IBM’s 2019 report shows that an efficient response plan can save businesses over $1.2 million USD.
Authenticity is vital while dealing with the aftermath of a breach. The way American home improvement retailer The Home Depot dealt with an ugly data breach in 2014, is a great example. They sent out informative emails to customers and issued a timely press release. Customers prefer being devastated by such news than being kept in the dark.
The TikTok debacle shines a light on the dangers of irresponsible data collection, and the importance of data privacy. Done right, data-driven practices can take your business to new heights. However, with big data comes big responsibilities. Firms must tread cautiously to make sure they don’t overstep.