Data Privacy and the Impact on Data Analysis

Updated: Jan 30, 2020

As data has become more important for businesses, the collection and transference of personal data online has grown exponentially as well.

We live in a world where everything a person does online can be collected. Consumers are no longer willing to be complacent regarding their personal data and there will be new laws put in place to give consumers more power. Following the massive Facebook security breach, change felt inevitable and those changes are now here.

GDPR was a major turning point in Europe, but no law is currently more important than the California Consumer Privacy Act. The CCPA will provide California residents with a lot of power over their personal data online. While this law will provide consumers with a lot of power, where the CCPA will have a major impact is in the laws that will follow. Like the automotive industry, California is leading the charge for industry change. As the most populated state in the US, California is seen as a trendsetter for what is to come and will give a good look at the future. While there is uncertainty over how these laws will work, one thing is for certain. We are entering a new era of data privacy in the United States.

Companies want more quality data to make impactful decisions, and consumers want their data protected, putting both in direct conflict with each other. This is going to cause complications, and an area to see these complications, is data analysis. This is the process of utilizing data to support the decision-making process and ultimately allow businesses to operate more effectively. With new privacy laws, we could see a decrease in the data available. However, data analysis requires massive amounts of data to learn and make insights. With less data available, it could ultimately hinder the ability of companies to use data analysis to make informed decisions.

While this appears as a major roadblock for many companies, there are ways in which data analysis can still play a crucial part of the decision-making process. Personal data will become more limited, but anonymized data can still be used to drive business decisions. Does a company need to know every single customer personal data if enough anonymized data can lead to the same insights? If the data is truly anonymized any security breaches would not result in the leak of personally identifiable data, easing consumer concerns.

Data is extremely important for healthcare and it has already been heavily regulated by HIPAA since 1996. But we could see even more limitations in the future. Healthcare data can be collected, but it needs to be anonymized to be compliant with current laws. Now how will companies learn about patients if they completely opt out of having their data collected? It’s no longer anonymized or hidden behind a barrier; it is simply gone. Healthcare data is extremely personal and differs by almost every person. To provide the best value and treatment, knowing everything about each patient is the best route. One of the bigger challenges moving forward for healthcare companies will be providing value for people who don’t want to provide helpful data back. Companies will need to adjust whether it be through anonymized data or only using data where the user has opted in. Either way we are heading in a direction where there will most likely be less data available.

Updates to data privacy laws are an inevitable change and we have already seen the first wave with the CCPA and GDPR. These laws will have far-reaching impacts on data from collection to implementation to analysis. But while data privacy is going to continue evolving, it won’t be the death of data analysis. If the data is handled properly, it can be still be used to drive business decisions.

Personalized data might become more volatile to handle, so completely anonymized data might be the way to proceed in the future. Companies will need to start figuring out the data landscape to determine how data can be used to help their businesses operate. Otherwise there could be serious repercussions from flawed business management to legal punishment. The data landscape is changing, and future change is also inevitable, but the analysis of data can still be used to drive efficient business decisions if done correctly.

Adam Armendinger // Manager, Media at Underscore Marketing - a worldwide strategic media company providing ROI solutions in the health & wellness, healthcare and pharma space.

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