Australia’s biggest consumer brands are falling short when it comes to gaining consent to use their customers’ data, a new report has revealed, and experts say the coronavirus crisis is throwing a spotlight on long-standing consumer privacy issues.
None of Australia’s top 100 consumer brands met best-practice guidelines for gaining consent to use customers’ personal information, the Deloitte Privacy Index 2020 revealed this week.
Retail was the best-performing sector when it came to consumer consent, while health and fitness, finance, and telecommunications and media were the worst.
However, the overall industry analysis found that no sector scored above 30 per cent when its consent practices were tested, demonstrating “industry-wide and regulatory immaturity”.
The index highlighted a disturbing disparity between consumer expectations and industry consent practices.
Only 16 per cent of brands offered consumers the option to opt in to marketing activities.
By contrast, 83 per cent of consumers said they are concerned by internet cookies that track their activity online and use this information for marketing purposes or to sell information to third parties.
“Meaningful consent should now be front and centre for every industry and every sector,” Deloitte partner and Index author David Batch said.
How the index works
The index homes in on a different privacy element each year, with consent practices under scrutiny in 2020 following 2019’s look at privacy practices in brands’ apps.
To compile the rankings, researchers surveyed more than 1000 Australian consumers aged 18 and above, and quizzed them on their personal consent-giving practices and preferences when interacting with apps and websites.
The responses were then compared with analysis of the websites and mobile applications of Australia’s top 100 consumer brands, as well as privacy breaches and consumer complaints data.
The results were scored and aggregated across 10 industry types to rank each industry to create the Index.
“Retail has jumped from fifth place to first, demonstrating that, as an industry, it manages consent privacy practices in 2020 better than it managed application privacy practices in 2019,” the report explained.
“However, this does not indicate that the retail sector provides consent best practices to consumers.”
COVID-19 highlights need for consumer trust
Consumer trust in privacy has shifted dramatically across major sectors over the past six years, the 2020 index shows.
“Financial services have seen the biggest loss in trust in privacy, but are still in positive territory, meaning more consumers trust than distrust financial services brands with their personal information,” the report said.
“Government has also had a significant drop in trust in privacy over this period, returning a near-zero result in 2020, meaning there were
as many consumers saying they trusted government brands as there were distrusted.”
The Telecommunications and Media sector continues to be the “least trusted by consumers overall, albeit on a positive trajectory”, the report said, with 94 per cent of consumers that distrust this industry named Social Media brands as those they trusted least.
The pandemic presents an opportunity for brands to better serve their customers and boost trust in the digital economy,” Mr Batch said.
“Meaningful consent is the real opportunity for brands in COVID-19 times and beyond,” he said.
“And it is the responsibility of every organisation in Australia that accesses and processes personal information to do its bit in increasing trust in the digital economy.”
Good consent “must be expressly sought and voluntarily given”, Mr Batch said.
“We’re seeing this in COVID-19 initiatives such as tracing apps, where the concept of care drives voluntary participation and builds trust between community and government,” he said.
“If we’re to maintain trust in institutions and corporations, meaningful consent is essential to the bigger picture. Now the community is waking up to the power and value of data, real transparency, fair value exchange and true voluntariness will be required to establish consent and trust.”
COVID has “brought economic, environmental, social and digital issues into sharp relief”, Chair of Ethics for the Macquarie Business School and consumer researcher Jana Bowden told The New Daily.
Consumers are, perhaps more than ever, reassessing their values , lifestyles and consumption activities,” Dr Bowden said.
“How the big brands access and use consumer data is a part of that narrative. Consumers are becoming acutely aware of the value of their personal information, as well as the need to protect it.”
The pandemic has triggered an eCommerce boom in Australia, with online shopping in June up 72 per cent compared to the same time last year.
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Whether it’s shopping or social media, online is “the new normal”, Dr Bowden said.
“Whereas pre-COVID only approximately 9 per cent of consumers shopped online, we are now seeing double that figure and the trend will only increase,” she said.
“The shift to online means that while consumers are navigating “the digital realities of COVID, they are also likely to be giving more of their personal data away and this is leading to increasing concerns around personal privacy.”
Balance of power must shift
The poor performance of the top 100 consumer brands in Deloitte’s index show that it’s time for the balance of power to shift “out of the brands’ hands and into the consumers”, Dr Bowden said.
“Consumers should be empowered to know what information is being collected about them, as well as when, how and why it is being collected,” she said.
“We need to move away from questionable, non-transparent, sleight-of-hand approaches to digital consent.
“We need to put the controls squarely back into consumers hands by ensuring that are fully informed and able to make judgments based on complete information.”