How to Navigate Data Privacy and Compliance with a CDP

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Organizations have become more concerned about how consumer data is being handled and exposed as new data privacy laws and regulations continue to reshape how brands and customers manage personal information.

It all started with the European Union General Data Protection Regulation (GDPR) in 2018, which protects the personal information of EU citizens across the world. Then came legislation like the California Consumer Privacy Act (CCPA), which secures privacy rights for California consumers, along with amendments to the Gramm-Leach-Bliley Act (GLBA) (a 1999 financial services regulation) to include new penalties for firms that expose consumer data.

New GLBA amendments impose stiff fines, penalties, and possible prison time for privacy violations. It also holds organizations responsible for protecting personally identifiable information (PII) from unauthorized disclosure. Organizations that handle U.S. consumer financial data have a December 9, 2022, deadline to comply.

U.S. consumers are also concerned about how their data is being used. Seventy-nine percent of respondents in a Pew Research Center poll said they are very, or somewhat, concerned about how companies are using the data they collect about them.

Ultimately, consumers want more control over their data. Ninety-three percent of Americans consider it important to be able to control who can access their personal data. Consumers also want more data privacy regulations from governments, so companies shouldn’t expect the trend to end anytime soon.

Being compliant today isn’t just about meeting regulations — it’s also about building trust with customers and providing transparency, while adding value through personalization. Providing adequate data privacy and security, while remaining compliant, is a necessary step for organizations that want to use consumer data for business value and innovation. 

Centralizing Data Management with a CDP

Data needs to be centralized to manage data for compliance. A major challenge for brands is that their data is often scattered across multiple, disparate silos. Brands must look for the appropriate data management solutions that will allow them to bring data together in a centralized database so compliance requirements can be met.

One of the primary platforms that is becoming mission-critical for companies who need to manage customer data centrally is the customer data platform (CDP). CDPs are designed to collect and integrate data from various data silos, making it ready for use across other software applications. Marketing professionals also know the importance of a CDP to their data privacy efforts. Ninety-two percent of marketers consider a CDP important to their privacy and compliance efforts, according to the 2022 Treasure Data State of the CDP Report.

Some enterprise-grade CDPs have centralized compliance controls, or can integrate with a consent management platform. With the right CDP, brands can get more visibility and control over how data is being handled, transported, stored and accessed by different teams across the enterprise.

One of the main features of a CDP is that it combines disparate data into a single customer view (SCV). This unified profile can be used as a single source of truth across the enterprise, making it easier to track and manage privacy controls and permissions across the business.

Building Trust with a CDP

With regulations like the CCPA and GDPR, an individual’s consent allows a company to use personal information for specific, agreed-upon purposes. In return for the use of their personal data, companies must explain how that data is used and provide access to the data the business has compiled on them.

Customers want to do business with brands that provide more transparency into their data gathering practices. Customers also want to trust the brands they have a relationship with. The more trust there is, the lower the churn, ultimately improving retention, and potentially lowering customer acquisition costs (CAC).

The trick with omnichannel marketing is providing the level of customization consumers have come to expect, without sacrificing the security of their personal information. Developing customer trust requires marketers to match one-to-one personalization with one-to-one privacy, while taking all attributes and consent options into account with every interaction.

Organizations can use a CDP to set data governance standards, in which brands can allow consent by creating data access policies, enable audit logs to ensure policy compliance, and identify any suspicious activity. A CDP can then provide security management that allows access to only those in the business who need to see specific PII or business-sensitive information. Sensitive data and information can be hidden from everyone else.

Owning Your Data

With the significant depreciation of third-party cookies, along with the increasing complexity of data privacy regulations, it’s critical for businesses to use their data intelligently to attract and retain customers across the full customer lifecycle.

Centralized data helps brands stay in compliance with GDPR’s “right to be forgotten,” with automated data subject access requests (DSARs) and enforceable consent management.

These changes have pushed brands to shift their marketing and advertising programs towards a first-party data strategy. Some brands are also shoring up their second-party partnerships by shifting to data sharing through a data clean room environment. 

While a CDP will serve as the center of your first-party data strategy, a data clean room can be used as an extension of that strategy. Organizations can connect their CDP to a data clean room so data can be anonymized and analyzed alongside partner sources.

Building Trust and Security with a CDP 

Putting customer data to use across channels carries a good amount of risk. Businesses need a comprehensive data management solution to apply the right restrictions at the appropriate times without slowing down campaigns.

With a CDP that has data tagging, protection, and permissioning, you’ll be able to mark sensitive data and only allow visibility to the people across the organization who need to see it or use it at a given time. At the same time, you’ll be able to empower teams who need to activate that data, including agency partners, to access data without exposing sensitive or protected information.

Trust is a key factor in any relationship. Building trust in today’s complicated, global privacy and security landscape is no small challenge. With evolving data privacy regulations, marketers must be diligent in gaining consent from customers. A CDP gives businesses the data management capabilities to get started.

Learn more about data privacy and governance best practices here.

Brian Carlson
Brian Carlson
Brian Carlson is the Founder and CEO of RoC Consulting, a digital consultancy that helps brands establish the optimal balance of content, technology and marketing to achieve their goals.