Why Data Ethics is Important

If you’re active in any form of business, you will collect data about your customers. That’s especially true if you have any form of digital presence, albeit a website, or even just a social media page.

Data collection is a staple of successful businesses, because it lets you personalize the experience of your customers, and make informed business decisions. When you know more about your audience, you’re able to serve them better.

But you can’t just bundle information in a Google spreadsheet and use it for whatever you want. That would be unethical. And it’s exactly what data ethics is concerned with.

What Is Data Ethics?

By definition, data ethics “is a branch of ethics that evaluates data practices—collecting, generating, analyzing and disseminating data, both structured and unstructured—that have the potential to adversely impact people and society.”

If you have a list of your customers’ email addresses, and you’re not careful about managing it in an encrypted digital “safe”, it can backfire. Cybercriminals can gain access to it and sell, or publicize that data, harming your customers, and also your business.

Data ethics seeks to analyze and suggest principles in managing the data of your customers (or potential customers). Some of these principles include:

  • Privacy. Customers should rest assured that their data is always stored safely, and doesn’t threaten their privacy.
  • Transparency. Customers should always have access to the data a company stores about them.
  • Awareness and Consent. Customers should be comprehensively informed about what their data is used for, and consent for those specific uses, nothing more. A variety of options for how customers want their data to be used is also expected thanks to these principles.

Keep reading this article to better understand why data ethics is important, and how you can implement data ethics principles in your day-to-day activities.

Why Data Ethics Matter

Most of the time when humans develop a new way to further society, that innovation can also be used for nefarious purposes. Data collection is a gold mine for driving businesses further. But it can also be the stuff of nightmares if hackers get their hands on customer data.

So like with any other innovation in the past, data ethics developed to answer this challenge, and create a framework for businesses to treat data ethically. 

A relationship based on trust and fairness

When you set aside any pragmatic benefits you’d get from ethical data collection, the matter is all about trust and fairness. Someone’s personally identifiable data, like their name, phone number, or email address are extremely sensitive information. If they trust your business with that information, it’s only fair you give back nothing short of privacy and security. 

Data ethics dictates a common sense approach to data collection. Building any kind of relationship can only be fruitful and healthy with the help of trust and fair treatment. Business relationships are not different.

Good business sense

Having an ethical data collection and management system makes business sense. A data breach can cost as much as $8 million, but the number can be way bigger if your company has a lot of data on their hands. 

Employing good data ethics principles can be important for this fact alone - you want to avoid a messy data breach. If your customers’ data is leaked, it will cost you money in lawsuits, people won’t trust your company as much, and you’ll lose a lot of people from your customer base.

Maintaining the legality of your business

The GDPR made a big splash back in 2017, and it has since dictated the framework for data processing in Europe. However, many other places are jumping on the bandwagon. California has a similar piece of legislation, called the CCPA. Moreover, the US overall has its own data protection regulation, especially when it comes to the finance sector. 

And this legal framework is bound to expand. Companies that employed data ethics principles before the GDPR didn’t need to do much to adapt. If you want to be prepared for legal changes in the field of data safety, you can employ data ethics principles too, even if you don’t fall under the jurisdiction of the GDPR right now.

How To Implement Data Ethics

Ethics have always been an exercise for philosopher’s to debate about for hours on end. And it’s valuable that we have those principled discussions to revert to when thinking about ethics. But like most philosophical fields, their applicability can be just as important. Ethics aren’t discussed in a bubble, they affect our daily lives.

Data ethics are no different. It’s important to talk about the intricacies of data collection, and whether or not specific forms are principally ethical. But those talks should be used to drive real life actions.

So if you want your company to live by the principles of data ethics, how can you go about it?

A good starting point is existing legislation. Regulations like the GDPR mandate privacy, transparency, awareness and user consent in all matters related to data ethics. And they also offer practical guidelines for adhering to these principles.

For example, customer interactions should be as clear and exhaustive as possible in matters of data collection. Sure, your conversion or bounce rate might dip a little bit if you have a big data pop-up, but they’re necessary if you want to strictly adhere to data ethics principles. Another thing is the existence of a Data Officer. A person in charge of multi-disciplinary, and multi-departmental respect for data ethics, data protection, privacy and security. 

These are a good starting point, but you can take it a step further. Data collection and processing seeps into every action, of all of your departments. Analyze how data is used in your company, and come up with solutions or regulation that helps your organization better protect customer data.

In Conclusion

Data ethics tries to discuss, and promote principles like transparency, privacy, and awareness in the world of data collection. But the discussion of data ethics isn’t supposed to just happen among philosophers in informal discussions.

No, data ethics is equipped to allow businesses to change their pragmatic approach to data collection, and create a better, more fair environment for consumers.

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