Let’s start by considering a data point from a recent Greyhound Research study titled Global Mobile Apps Outlook 2017. From the 300+ global app makers we interviewed, nearly all state focus on a MobileFirst strategy and further simplifying User Experience as their top agenda for 2017. Our ongoing tracking of the market confirms that this agenda is unequivocally endorsed by both consumer and business apps makers alike.
While there is little doubt in the need to offer users simplified, immersive experiences, at Greyhound Research we believe most app makers do not give data privacy the attention it deserves. In fact, in most cases, it’s an afterthought. Findings from the study above also confirm the same – only 30% global app makers put Data Privacy in their top 3 focus areas. The study also points to this problem being most acute with Startups.
We ran into this scenario only recently with a relatively well-known global startup that prides itself on its innovation and delivering exceptional experiences to customers. During one of the workshops that we were conducting for the company, we realised that while the company has done well to focus on delivering immersive, MobileFirst experiences, it didn’t have what can be considered a robust approach to data privacy. Not to say there was no strategy in place, but not the level of maturity one would expect from a company that is dealing with sensitive personal data like credit card details, contacts database, pictures among others. In fact, to our amazement, the company is freely sharing data (using APIs) with what it calls as ecosystem partners. Furthermore, the company is now planning to make its services available through chat bots and considering using APIs of 3rd party voice-recognition software in order to provide better experiences. And all this liberty on the back of enterprises and consumers hitting accept to the fine print of Terms & Conditions that are seldom read.
While the effort that this and other companies are putting in place to deliver exceptional experiences are undoubtedly appreciated, it’s their band-aid approach to data privacy that worries us the most at Greyhound Research. While most app makers respond to this hiding behind the safeguard of privacy laws mandated by the government, but we need to ask if that is truly enough.
The situation is made more complex as enterprises are now beginning to use consumer apps for which the decision is led and paid for by the business and not technology. For example, enterprises are now using apps like Canva, SoundCloud, WordPress.com among others that store an organisation’s Intellectual Property. Our ongoing tracking of the market confirms that such apps when bought by the business witness seldom or no interference by the technology or legal functions. In situations like these, there is little control, let alone governance, on how such app makers use, store and share organisational data. Critical to note that when enterprises (that have both the wherewithal and the know-how of data privacy) fail to control their data while using such apps, how will the average consumer fare when using these.
In addition, while free consumer apps like Gmail, Hotmail, Twitter, Facebook, WhatsApp among others have been well received, the rampant use (and abuse) of personal data by the makers of these apps for driving advertisement revenue is well-known. At Greyhound Research, we are of the firm belief that this trajectory of using personal data for monetization will be further fuelled hereon. The introduction of AI-enabled virtual assistants like Siri, Alexa, Cortana, Google Assistant among others coupled with consumer Internet of Things (IoT) devices like Amazon Echo and Google Home (that are increasingly making their presence felt in an average consumer’s household) now have access to speech data that was previously unavailable. Not to forget all the data being captured and analysed by the makers of fitness bands, smart watches and smart home devices.
As well-informed citizens of a connected world, we need to look at this change in the light of an understanding that government regulations are unable to keep pace with technology advancements and in nearly all instances playing catch-up.
Why This Matters To Consumers
As a consumer of these free apps, if you agree to the points above, then give feedback to the makers of your favourite mobile app. Tell them you seek a more secure, transparent experience over merely better-looking apps that trade your data for some cheap cash. Tell them, you don’t mind living with some rough edges on that favourite app in lieu of a more transparent experience. In the meantime, be mindful that while you in your individual capacity have no control on how your data is captured, stored, managed and shared, what is definitely under your control is what you post and share.
In the end, do remember, if an app is being offered free, then you and your data are the product. Don’t just take our word for it, see the charts below. While chart 1 and 2 confirm maximum revenues from advertising fee for both Facebook (97%) and Twitter (88%), chart 3 points to how much per user is worth to Facebook. Clearly, not every user is worth the same dollar opportunity – those living in the US & Canada fetch a handsome USD 15.65 for the company, more than 8 times the Asia Pacific average of USD 1.89.
Why This Matters To Enterprises
As an enterprise user of these apps, many of which are primarily meant for consumers, it’s important to be cognizant that using them often means walking on a cybersecurity and data privacy minefield. While some of these apps offer a paid subscription of their free version in lieu of a more secure, advert free access, but there are enough and more areas that deserve attention. Critical to remember that enterprises have compliance and regulations to meet and using some of these apps without thorough due diligence on access, licensing and contract terms, certification, data residency among other areas can land organisations poorly in front of regulators, customers and other stakeholders.
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Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.
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