We, as consumers ourselves, are well aware of the trade-offs we make in exchanging data for discount codes, exclusive offers and while interacting with brands online, creating a treasure chest of information that is used by organisations of every kind. In this great data exchange, are you concerned about your online privacy?
If yes, you are in good company. Our COVID Crime Index found that 84 per cent of consumers expressed concerns about their digital identity and personal information online. The majority of us talk a good game about online privacy; however, in reality, we tend to overshare, reveal and give away that bit more personal information than perhaps we realise.
The majority of consumers will say they care about online privacy, but it's likely their online behaviour will tell a different story. This disconnect between preferences and actions has created a ‘privacy paradox’.

Paradox predicament

Personally, I certainly relate to the 84 per cent of consumers who expressed concern about their personal information online. However, a quick glance at the myriad of apps on my phone and the sheer volume of spam emails I receive tell a different story. It's a stark reminder that the services I love to use and are so entwined with my life only exist because I chose to readily share my personal information with them in the first place.
So, why don't my actions align with my privacy preferences? I talk the talk; I would describe myself as data literate and more aware than most of how data can be used and abused by others. However, this is where research from the National Bureau of Economic Research gives a fascinating insight into the role that incentives, however small, play in tempting us away from our privacy preferences. The 'Pizza over Privacy' study provides real-life evidence of how individuals are willing to put aside their own – and friends' – privacy preferences for the price of a pizza.
When the gratification of a reward or incentive feels worth it, and the insatiable demand for 'right now' services and information results in a hastily ticked consent box. It also begs the question, why don't my own and so many others’ actions and choices reflect our preferences? And how do organisations successfully navigate this disconnect?

Situational trust and context

Data privacy is a nuanced issue, influenced by the context in which consumers are asked to share their personal data, and there isn’t necessarily a perfect answer. While privacy paradox studies often conclude with ‘consumers say they value privacy, yet exhibit behaviours that at times contradict this preference,’ does this truly reflect the whole story? Likely not.
Are consumers downplaying privacy risk and displaying complacency, or are they making active choices and trade-offs in specific contexts about risk versus opportunity and their perceived level of trust in the organisation? The pandemic has shone a bright light on the use and sharing of data, and now the ethics of our data forms part of our own personal ethics arsenal.
But what does this mean for banks and other financial institutions? To help you explore the privacy paradox as part of your data ethics discussion, we have put together five workshop questions you can explore and reflect upon within your teams as part of our complimentary privacy paradox insight paper, which also includes insight into how to distinguish your three types of customers by their privacy preferences that can be used to inform your data strategies.

Demonstrable privacy policies

It’s no longer enough to provide a long, jargon-heavy privacy notice and bury it in the depths of your website. Vague data privacy practices may fulfil a short term need to pay lip service to consumer demand, but they undermine customers’ trust, damaging longer-term competitiveness.
Organisations must educate customers, especially when it comes to how their data is used within banking systems, and provide tangible context to help them make informed decisions.