Building Privacy-First Consumer Experiences with Technology – Affinidi

By Srikanth
12 Min Read
Building Privacy-First Consumer Experiences with Technology - Affinidi 1

What are the challenges in traditional data collection?

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Traditional data collection methods, such as manual data entry, survey paper forms, and indirect data gathering from third-party sources, face significant challenges. Other traditional methods include tracking cookies, IP tracking and website analytics, which often collect data without explicit user consent. These methods often need more direct interaction and transparent communication with customers, making them prone to errors and inefficiencies.

Businesses may collect data through various channels, including first-party data (directly from customer interactions), second-party data (shared through partnerships), and third-party data (purchased from external aggregators).

Many of these data collection methods encompass first-party, second-party, and third-party data, which often involve issues with transparency, privacy, and data accuracy. These methods pose several challenges for businesses.

Human errors in manual entry can distort data quality and affect decision-making. The high costs associated with labour-intensive data entry and managing fragmented data sources make these methods expensive and inefficient. Data fragmentation complicates the cohesive analysis, while inefficient data management raises compliance issues, risking regulatory penalties. Centralised data storage is also vulnerable to cyberattacks, exposing sensitive information and causing significant financial losses.

Traditional data collection methods may lead to privacy violations for consumers, as data can be used beyond the initial consent. Often, consent is blanket or broad, allowing for unintended uses of the data without the consumer’s explicit knowledge or approval. This lack of transparency erodes trust and loyalty, with confusing data-sharing options further undermining consumer confidence. Additionally, reliance on third-party data can result in inaccurate information, negatively affecting customer experiences. Inefficient data collection also limits the ability to personalise services, reducing overall customer satisfaction.

According to you, what are some of the modern solutions to navigate through these challenges?

    While customers still have ever-growing concerns about their personal information being stored and used without consent, they are still willing to share data with companies. Deloitte found that while consumers state that they want more protection and security, they may be more willing to provide their personal information if companies are transparent about how they intend to use consumer data.

    To address the issues of traditional data collection and leverage consumers’ willingness to share information when transparency is ensured, businesses should adopt more transparent, ethical, and convenient data collection practices. Some solutions include:

    • Zero-party data (ZPD) is information consumers willingly share with companies in exchange for personalised offers and services. For example, James, an avid traveller, visits a website and proactively shares his travel preferences. This provides the company with accurate and consented insights into his interests. ZPD is trusted and precise, unlike other data types, helping businesses better understand their customers.
      • Zero Knowledge Proof (ZKP)–an extension of ZPD practice, can verify certain facts about a person or an entity without revealing underlying details, such as Personally Identifiable Information (PII). For instance, rather than having a person prove that they are an adult by disclosing their date of birth, a government could issue a ZKP that confirms someone’s adulthood based on local legal definitions. Zero-knowledge proofs (ZKPs) are beneficial because they enhance privacy and security for consumers by allowing them to verify information without revealing the actual data. For businesses, ZKPs build trust with customers, reduce data handling risks, and ensure compliance with privacy regulations, ultimately leading to stronger customer relationships and improved data protection.
      • Passwordless authentication techniques allow individuals to onboard a new website or application without repetitively creating new user accounts that would otherwise require them to populate fields with more personal details than necessary. Passwordless authentication benefits consumers by providing a more secure and convenient login experience, eliminating the need to remember complex passwords. It also saves time by reducing onerous and repetitive onboarding processes. For businesses, it reduces the risk of data breaches, lowers support costs associated with password management, and enhances user satisfaction, increasing trust and engagement.
      • And on a basic level- Storing only essential data rather than everything, is a strategic approach to data management that enhances efficiency and security. This method reduces the burden on storage systems, leading to cost savings and improved performance. By focusing on essential data, organisations can streamline their processes, making it easier to retrieve and analyse information quickly. Moreover, it minimises the risk of data breaches by limiting the amount of sensitive information that could be exposed.

    Collaborating with brands that adopt these techniques, such as Affinidi’s Holistic Identity solution, builds trust, promotes data sovereignty, and provides richer, more accurate data, enhancing consumer experiences and operational efficiency.

    1. How does Affinidi incorporate privacy-first solutions to empower individuals and organisations?

    Trust is the cornerstone of digital interactions today. However, we are seeing a noticeable decline in consumer trust, with around 30 pers cent of customers worried about their personal information being shared across multiple companies.

    To overcome these concerns, boost sales and build brand loyalty, companies must strengthen consumer trust by empowering them with control over their data. This can be achieved through a concept we call Holistic Identity (HI), the linchpin for Affinidi’s Trust Network (ATN) and its suite of solutions. Affinidi’s suite of HI products offers several key advantages:

    • Enhance Customer Insights: HI leverages ZPD to gain comprehensive and accurate customer insights, enabling the delivery of personalised and relevant user experiences. This also simplifies and enhances the onboarding process by verifying identities efficiently, providing customers with a seamless and effortless start. By accurately understanding what end-consumers are keen on, companies can create more relevant product recommendations, targeted marketing campaigns, and personalised content. This leads to a more satisfying user experience and stronger customer loyalty.
    • Building Trust and Transparency: HI fosters secure and trusting interactions between businesses and consumers by allowing companies to collect valuable ZPD directly from users, with clear user consent about what data is shared and how it is used. HI builds customer trust by ensuring compliance with rapidly evolving regulatory laws and data protection practices.
    • Minimised Impact of Data Breaches: HI focuses on collecting only essential data to maintain high-quality and accurate information, reducing the risk of errors and inconsistencies. This drastically reduces the amount of customer data (also known as Personally Identifiable Information (PII)) held by organisations. Incorporating such an architecture into a brand’s infrastructure helps to minimise the impact should data breaches occur.
    • Leverage Open Extendable Technology: HI utilises open standards to avoid vendor lock-in, ensuring greater flexibility and control. It also facilitates easy integration and scalable growth, minimising the need for extensive system overhauls. This approach ensures transparency, control, and personalisation, ultimately leading to stronger customer loyalty and business growth.

    Some of the underlying technologies that power the ATN suite of solutions include Decentralised Identifiers (DIDs), Consent Management, Decentralised Messaging passwordless authentication, and zero-knowledge proofs (ZKPs), just to name a few.

    • Decentralised Identifiers: Decentralised systems are an effective solution to combat the rise of cyber-attacks due to their increased resilience, fault tolerance, security, scalability, and flexibility. Unlike centralised systems, which are prone to single points of failure, decentralised systems can withstand breaches by operating independently and distributing workloads across multiple nodes. DIDs, a World Wide Web Consortium (W3C) standard, let individuals consolidate their digital footprints under one manageable identifier, enhancing privacy, transparency, and data portability. This empowers individuals to independently create, manage, and control their digital identities from central authorities.
      • Our HI solutions also consolidate scattered user data into a secure repository known as the Affinidi Vault that respects user autonomy and enhances data sharing accuracy. This personal data repository offers users a transparent and comprehensive 360-degree view of their data, enabling greater control. With the Affinidi Vault, users can discover, collect, store, share, and monetise in exchange for desired benefits. This setup facilitates smoother digital interactions, broadens access to inclusive services, streamlines the creation of efficient digital pathways, and diminishes reliance on intermediaries.
    • Consent Management: Individuals can share their data with businesses on their terms with Affinidi’s consent management framework. It allows them to reveal only the information they have agreed to share, which fosters transparency and gives them control over their data. This strategy is consistent with an IDC info brief that found 87% of consumers are willing to divulge personal information in return for benefits, savings, or better services.
    • Decentralised Messaging: Unlike traditional messaging platforms that centralise data and control, Affinidi’s approach empowers users to own their data, reducing the risks associated with centralised data breaches and unauthorised access. Each message is encrypted and stored in a decentralised manner, ensuring that only the intended recipients can decrypt and read the content. This not only enhances security but also promotes transparency and trust, as users can be confident that their communications are not being monitored or tampered with by third parties. Decentralised messaging thus represents a significant step forward in creating a more secure and user-centric digital communication landscape.
    • In addition, these two technologies mentioned earlier, Passwordless authentication and zero-knowledge proofs (ZKPs), are worth highlighting.
      • Passwordless authentication simplifies onboarding by eliminating the need to create new user accounts and excessive personal details.
      • ZKPs enhance privacy by verifying specific facts without revealing underlying personally identifiable information (PII), reducing data exposure and breach risks. For example, a ZKP can confirm someone’s adulthood without disclosing their birthdate, ensuring privacy while meeting legal requirements.

    The Affinidi Trust Network (ATN) suite of products embodies our vision to revolutionise digital identity management. It empowers individuals with data sovereignty and safeguards their privacy by enabling them to discover, collect, share, store, and monetise personal data with complete autonomy. This approach fosters transparency and end-to-end trust in data transactions, paving the way for a future where individuals securely manage their data in exchange for the desired value. It creates a more trusting online environment and stronger connections between consumers and businesses based on transparency.

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