Companies aren’t transparent enough about their use of consumer data—is AI to blame?

by | Nov 21, 2022 | Public Relations

New research from internet tech firm Cisco highlights the critical need for further data-use transparency from brands and businesses as consumers say their top priority is for organizations to be more straightforward on how they use their personal data.

The firm’s 2022 Consumer Privacy Survey, its annual global review of consumers’ perceptions and behaviors on data privacy, also showed that while, in theory, consumers are supportive of AI (with 54 percent willing to share their anonymized data to improve AI products), many (65 percent) have lost trust in organizations due to their use of AI.

“Organizations need to explain their data practices in simple terms and make them readily available so that customers and users can understand what is going on with their data. It is not just legally required; trust depends on it,” said Harvey Jang, Cisco vice president, deputy general counsel and chief privacy officer, in a news release.

Companies aren’t transparent enough about their use of consumer data—is AI to blame?

This year, 81 percent of respondents agreed that the way an organization treats personal data is indicative of how it views and respects its customers—the highest percentage since Cisco began tracking it in 2019.

Consumers are increasingly taking action

In response to the erosion of trust in organizations’ ability to protect data, many consumers are taking action to better protect their data themselves including:

  • 76 percent say they would not buy from a company who they do not trust with their data
  • 37 percent indicated they had indeed switched providers over data privacy practices
  • 53 percent say they manage their cookie settings from a website before accepting
  • 46 percent of those with a home listening device say they turn it off regularly to protect their privacy

Disconnect between business and consumers when it comes to AI

Ever-evolving technologies make it difficult for consumers to trust companies with their data. Most respondents believe the potential benefits of AI outweigh the risk, provided proper de-identification is in place, with 54 percent willing to share their anonymized personal data to help improve AI-based products and decision-making.

Companies aren’t transparent enough about their use of consumer data—is AI to blame?

However, there is a disconnect between businesses and consumers: while 87 percent of organizations believe they have processes in place to ensure automated decision-making is done in accordance with customer expectations, 60 percent of respondents expressed concern about how organizations are using their personal data for AI. Powerful steps organizations can take to address this include giving consumers the opportunity to opt-out of the AI application and explain how their AI application works.

Desire for government to play a primary role

Finally, more than half said national or local government should play the primary role when it comes to protecting consumers’ data. Many consumers do not trust private companies to be responsible with personal data on their own accord.

Companies aren’t transparent enough about their use of consumer data—is AI to blame?

As governments and organizations continue to demand protections on data transferred outside their national borders, more are putting in place data localization requirements, demanding data to be physically stored in the country or region where it was collected. Yet data localization comes at a price—another report, the Cisco 2022 Data Privacy Benchmark Study, reported that 88 percent of surveyed organizations experience significant additional operational costs due to data localization. Consumers are evenly split on the value of data localization (41 percent in favor, 41 percent against) if it adds cost to the products and services they buy.

Companies aren’t transparent enough about their use of consumer data—is AI to blame?

“We hope that the insights from this survey will motivate organizations to continue to prioritize their customers’ desire for security, privacy, and transparency,” said Brad Arkin, Cisco senior vice president, chief security and trust officer, in the release.

Download the full report here.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter