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The many challenges and opportunities that face digital service providers with customer data

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Why digital service providers need to position customer data as a key part of their future strategies
The many challenges and opportunities that face digital service providers with customer data

Its only in the last number of years we are beginning to understand the security, importance and value of customers data. This is particularly relevant to a digital service provider. As the number of new online services and connected devices grow, the amount of companies that have their hands on customer data is enormous. In recent years, there have been a significant number of high profile data breaches. These occurrences have only highlighted the importance of this data to both the customer and the digital service provider.

Data breaches are making headline news all too frequently these days with major hacks on organisations such as Sony PlayStation, Talk Talk and recently Three UK.  These types of data breaches can have devastating effects for the company and more significantly for the customer. For the customer, the data this opens up a raft of challenges depending on the levels of data breached. Having your private information in the public domain can pose as a real personal and security risk. For digital service providers, a serious breach could have lasting implications for an organisation such as trust in the organisation and losses of revenue and customers. Security needs to be a top priority for digital service providers. It’s a daily challenge for the digital service to stay on top of the ways in which data can be breached.

Not everything about customer data is a negative either. There are opportunities for digital service providers to make money on the back of the vast amounts of data at their disposal. Once the data is anonymised with no connection to the individual user, then it can be packaged together to be sold.  Data such as usage trends, favourite apps, places visited etc. can all be packaged together and sold as market research. One great example of this is a company called Proximus in Belgium, packaged this level of detail together and sold at a starting price of £700. Another example is where Deutsche Telekom has been providing data to German city planners to help with traffic forecasting.  These are innovative ways for operators to leverage what they have in abundance. As operators are looking at new ways of selling products or solutions to their customers, this is an innovative of closing the revenue gaps seen by most global operators. 

The next step to this is giving the ownership of the customer data back to the customer. Telefonica have taken a clever approach to customer data. They look at it from two angles. Firstly, they are looking to ensure that their customers understand the security of their data. This refers to certain apps in the play store or iTunes that might want to access your personal data. They developed a traffic light system to warn their customers about untrusted apps who shouldn’t have access to your data. The second angle was to allow their customers to cash-in on selling their data anonymously to third party companies. Telefonica can see the value in this data and they want to give this back to their customers. This is an excellent way of demonstrating that you are putting the customer first.

The importance of customer data is going to grow equally as valuable and as vulnerable over the coming years. Organisations need to continuously bolster their security to ensure they are one step ahead of potential fraud or malpractice. At the same time the opportunities around the monetization of anonymised data are endless to organisations. 

Blog Author

Jonathan Plant
Senior Marketing Manager
Jonathan Plant is the Senior Marketing Manager in Openet where he develops and manages thought leadership content including white papers, webinars and blogs. He also manages the Openet website and events. Prior to Openet Jonathan held marketing management roles in Irish communications operator Eir.

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