The Internet of Things enables Internet-connected devices to “talk” to each other and transmit data. Often, such transmissions guide future product development by letting manufacturers know how people typically use those gadgets, whether they’re fitness trackers or smart speakers.
However, there are several issues related to the IoT and data transparency practices. These problems concern both businesses and consumers using IoT devices. Here are five of the most pressing matters.
Companies Often Don’t Have Accurate and Accessible Data Inventories
Statistics from a 2018 survey that surveyed respondents from more than 122 countries discovered only 51 percent of businesses had accurate inventories of where their data was getting stored, plus how it was collected and transmitted, regardless of whether the information related to customers or employees. That means most of them fell short with sufficient data transparency.
The next edition of that study may change, primarily due to the recently implemented General Data Protection Regulation (GDPR). It applies to countries doing business in the European Union and has a “right-to-be-forgotten” stipulation that enables customers to request that companies delete their data under certain circumstances.
But, when such a large percentage of businesses can’t authoritatively say where they store data, it’s no wonder customers have concerns about what information companies have and how they use it.
The U.S. Does Not Have Federal Regulations for Data Privacy
Unlike the European Union, the U.S. does not dictate how companies must handle consumer data. Businesses that don’t abide by the GDPR are at risk of fines, but those only operating in the United States don’t have to treat sensitive information so carefully. Even when federal agencies use IoT devices, they don’t abide by universal standards for data usage and sharing.
California recently became the first state to mandate that IoT device manufacturers meet minimum security standards, and that law will go into effect in 2020. It’s a start, but it only applies to security on devices, not the ways those gadgets collect data or what they gather.
When companies or consumers use IoT devices, they should scrutinize all terms and conditions before setting up IoT devices or the apps that often complement them. Unfortunately, if users opt out of data sharing because of these concerns, they may render their IoT devices useless.
IoT Devices May Reveal Confidential Business Practices
A survey from the Ponemon Institute and Shared Assessments polled risk professionals at businesses and found 97 percent feared “catastrophic” effects from insecure IoT devices. Perhaps that’s because many of them realized IoT devices are increasingly appealing at the corporate level, especially when companies want to increase supply chain transparency.
IoT devices give companies insights on the most efficient parts of their factories, let them engage in predictive maintenance and more. But, if those gadgets get hacked, confidential details about a business could get leaked, resulting in the release of trade secrets.
There is already a known concern of companies relying upon Chinese entities to make IoT devices, then learning those businesses participated in intellectual property infringement. Surprisingly, the Chinese companies can often do that without breaking laws because the intellectual property owners did not have sufficient protections in place before depending on outside parties.
Business leaders must be proactive and secure enterprise-level IoT devices before attacks happen. Moreover, they must thoroughly vet third-party companies involved in the manufacturing or supply chains.
A Lack of Transparency Could Compromise Profits
Complete transparency about data sharing with customers means more than following best practices. That’s because a survey found 90 percent of people would take their patronage elsewhere if they didn’t think brands were sufficiently transparent on social media channels. Although that study related to a particular kind of data, it shows people will quickly transfer their loyalty if they don’t trust brands.
When businesses tell customers how they’ll use data, it’s crucial to use easy-to-understand language and give notifications if data collection or sharing practices change at any time. Amazon lets consumers access their smart speaker recordings and delete them. Such a feature could increase trust in the brand.
Consumers Worry About Companies Knowing Too Much
A global poll from 2016 indicates more than 40 percent of people are comfortable giving details about themselves to companies if it results in more personalization. However, most individuals are not so open to permitting automatic data collection practices. In other words, they want companies to disclose when they gather information.
Some experts think blockchain technology could be instrumental in increasing data transparency or translucency and allowing anyone to see the kind of information companies hold. Until such a solution becomes a widespread reality, companies should be as upfront as possible about how they collect data on IoT devices and why.
Although consumer adoption of IoT devices is generally rising, recent research indicates people are wary of smart home devices invading their privacy. For example, 72 percent of people worried about home security IoT companies invading their privacy. That study also found people did not like companies using data to find out when they’d likely be home, such as to time their deliveries.
If the providers of IoT devices continue to offer services without simultaneously considering how to safeguard privacy, customers could become less interested in what they sell.
In contrast, if brands make it easy for people to toggle certain data-sharing features on or off, such functionality could help customers feel more in control of their information, and potentially not make them so wary that they stop using the devices altogether.
Businesses Can’t Afford to Ignore IoT Data Transparency
Keeping data secure is one essential component for brands and companies that distribute or manufacture IoT devices. However, it’s also crucial for those entities to be straightforward with customers about data collection and usage.
Failing to do so could cause businesses to falter, while focusing on transparency could prof,vide companies with opportunities to earn or maintain trust. – Digital Insurance