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Customer data - an asset or a liability?
by Ros Wells: Managing Partner for Retail and Leisure, Telefónica UK
As we all know, data is valuable. In the competitive jungle we work in, businesses need to understand their customers to survive. So customer data is an asset… isn’t it?
Like every great story there are two sides. Profiling customers using data has obvious advantages but what businesses often overlook is the dependency on virtual data, which requires higher investment in cyber security to keep in safe. In a world where hackers could cause your business irreparable damage at the press of a button, is it time for retailers to start viewing their customer data as a liability rather than an asset?
Let’s put this into context. Have you ever signed into your email or online banking using public wifi? What do you know about the network you used to view your data? Not a lot, right? It is increasingly common for hackers to pose as hotspots, so instead of signing into public wifi you actually sign in to their own network putting you at their mercy. Now imagine you used your business mobile – this could potentially compromise the entire corporate network. Since we are encouraging flexible working, both at home and on the move, these attacks are not inconceivable. So businesses must think about the security of their mobile estate.
Looking further ahead, retail and leisure companies are exploring location-based marketing which might add to the issue. Ideally, I could walk into a coffee shop to buy my morning Americano but there is no wait, no order and no exchange of money. This is because minutes before entering, they saw I was in the area and sent me a push notification to confirm that I would want my usual Americano. I confirm, walk in and pick up my order while being charged to my smartphone. This effortless, personalised and efficient service is not a question of if but rather when. But to deliver this experience, the company will hold data on my mobile identity, location, daily routine, coffee preference and banking information.
So, what’s the risk? New EU legislation means companies could face huge fines if a cyber-attack results in a loss of customer information. This is not a risk of the future. Attempts to steal data from retailers are already rapidly increasing, doubling every 12 months. To protect themselves, and their customers, retailers must make sure investment in cyber security keeps pace with investment in digital transformation. If they do this, then customer data should always be seen as an asset – never a liability.
To get ahead of the game, visit our website to learn more about cyber security.