Data is fundamental in order for companies to know what their consumer wants in allowing the company to market to them. Many consumers are happy to share data with these companies in order to receive a better customer experience, as long as the data being shared is consensually given.
What is the GDPR?
On the 25th of May 2018 big changes are happening to the way companies and marketers collect data from European citizens. The GDPR will prohibit the collecting, storing and using their personal data without their consent. This will give EU citizens greater control, privacy and security in regards to personal data. Previously the GDPR affected only companies located in the EU, now it will affect any company that operates within its borders and any of the 28 EU member states.
Regulation compliance Costs
Companies have always heavily invested in marketing and collecting consumer data. With the latest GDPR, they will have to invest more money in order to become compliant with the new regulation. It is expected that the majority of US companies will spend between 1 – 10 million USD to comply with the requirements of the regulations. Some larger companies are estimated to spend over 10 million USD.
Not only will the new regulation have huge financial costs in order to become compliant. It will also present obstacles and an unclear initial period as most companies are unclear as what will be considered as being non-compliant. They will have to wait and see how regulators will assess the penalties.
Compliance is nonnegotiable. If a company is found to be breaching the GDPR it will result in huge financial penalties such as fines up to 20 million Euros or 4% of the company’s global turnover. The penalty will depend on which is higher.
Benefits of GDPR
The main benefit of the GDPR is the protection it will provide to EU Citizens personal data. The regulation will also change the handling of personal data as before data breaches could have taken over 2 months to resolve. With the latest timelines, a data breach enforces companies to provide information to the country representative within 3 days and details of the citizen whose details were exposed immediately. As a result data breaches will be resolved much more quickly.
Another benefit of the GDPR is that it will force companies to become better at their jobs in regards to marketing and collecting consumer data as they have to be clear and open with their data collecting methods. This will create a valuable opportunity for companies to rebuild trust with their consumers.