Improving ethical business practices using data intelligence

Someone using a laptop analyzing data
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Now more than ever, every company is a data company. While organizations should tap into the data they have to their advantage, they also need to be mindful that in doing so, they must take responsibility for managing data in a way that is ethical for all parties involved. With the advent of Generative AI, the use cases for AI are even broader, so ethical treatment of data includes collection, storage, use, retention, and also the outputs from these new AI models such as generated chat responses.

Recent research by Capterra found that 44% of consumers have expressed concerns over how companies use the data they collect about them. For companies to properly protect customer data, they need to enact ethical data management practices, which means going further than simply complying with regulations. Instead, companies must weave ethics throughout their company ethos and train employees to use trustworthy data intelligently.

Jay Militscher

Vice President for Data & Analytics at Collibra.

Regulation compliance ≠ ethics

Being up to date and in compliance with current data privacy regulations is often equated to a business using data ethically, but this is not always the case. While privacy laws play a big part in data ethics, they do not entirely encompass what it means to handle data in an ethical manner. Even the businesses most compliant with privacy laws are susceptible to improperly handling customer data.

Although regulations strive to be as detailed as possible, they cannot inform every single decision behind an individual’s data usage. Therefore, managing data with ethical integrity usually falls to the people driving those decisions. Since data does not have a voice or an inherent sense of right or wrong, it is determined by the people and organizations using the data, including whether the decisions it informs are ethical or unethical. The moral decisions of data users determine the end results of these choices – whether negative or positive.

With great data, comes even greater responsibility

A company’s values are determined by each individual employee’s actions. What one employee does with company data can make or break the business.

A KPMG survey from 2021 found that roughly 70% of people are concerned by the amount of data companies collect. Customer trust is fragile, and when broken, it can lead to a damaged company reputation and potentially business failure. As a result of high-profile data leaks and greater public awareness of GDPR, the general population has grown wary of how their data is being used by organizations.

Companies must not only earn customers’ trust, but also keep it. In an age where data can make or break you, business leaders have the power to underreport behaviors that place them or their organization in a negative light.

To bridge the gap, businesses should consider ways to be more explicit and transparent about how consumer data will be used. The same KPMG survey revealed that despite 76% of people saying they want more transparency about how their personal data is being used by companies and 40% saying they would willingly share their personal data if they knew exactly who would use it and how it would be used, only 53% of business leaders are actively sharing this information with their customers.

Though we’ve established that compliance with regulations does not equate to using data ethically, there is value in establishing clear guidelines to set organizations on the right path. Without a stringent set of rules, agreeing on best data use practices becomes more complicated, and it is not always clear when a line has been crossed. When that data is mishandled and regulations are difficult to enforce, consumers are left vulnerable to breaches and malicious actors.

Adopting an ethically driven mindset

Don’t just comply, adopt. It is the organization's responsibility to weave ethics into its ethos by using intelligent, trustworthy data across each line of business. This includes only encouraging the use of data if it is being done in a compliant, transparent manner with the protection of customer privacy at heart.

Although all employees should be taught to care for their use of data, the duty largely falls to leadership teams to keep a close eye on how their company is handling data and enact high standards around the use of company and customer data to ensure data ethics becomes a part of company culture.

Implementing data intelligence – the ability to understand and use your data in the right way – is a key piece to using data ethically. Data intelligent companies ensure their data is up-to-date and trustworthy and train employees to use data both in a compliant manner and with high ethical standards. By setting up internal policies and data monitoring to ensure the proper use of data, companies can rebuild consumer trust while also avoiding fines and penalties.

However, as many business leaders know first-hand, building teams, establishing practices, and changing company culture are all easier said than done. It may not be possible to put data ethics into place overnight, but the stakes for companies could not be higher. Now is a better time than ever to adopt an ethically driven mindset, both to retain customer trust and drive value.

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Jay Militscher is Vice President for Data & Analytics at Collibra, a leading data intelligence platform that aims to make trusted data discoverable across any organization.