Transparency and informed consent should be prerequisites for the use of customer data with emerging technology, according to the data leaders of Telstra, Bank of New Zealand, and iCare. But it is still not a common practice in the industry, despite what some companies might say.

“This is the customer’s data, not our data,” said Bank of New Zealand’s head of data strategy and transformation and acting general manager, Sonya Crosby.

“So whenever we want to support them in a certain way using that data, we need to tell them and we need to actually explain the purpose which is being used and make sure that you have explicit consent.”

Sonya Crosby, head of data strategy and transformation and acting general manager, Bank of New Zealand. Source: Linkedin.

Crosby was speaking at a SAS panel in Sydney last week, which had been billed as an AI event. Crosby’s comments and those of fellow SAS customers Telstra and the NSW Government’s iCare, suggest for now AI use cases remain relatively basic when it comes to people’s data, as organisations remain focused on governance and consent.

Striking a balance between privacy and delivering experiences through data and AI boils down to consent and transparency, Crosby said.

“I think when people understand the why and if the context is correct, and it’s actually delivering a benefit to the customer, then that’s that’s half the problem solved. And then making sure that the clarity within the business is there.”

Elizabeth Moore, a data, reporting and analytics executive at Telstra, previously responsible for analytics at the Commonwealth Bank of Australia, said informed consent is critical, as is communicating the potential value.

“It’s not about a 17 page two point font document that you that you ask a customer to agree to once, it’s really [about] being clear and contextual,” she said.

Moore, who moved from Telstra’s marketing department to the “engine room” of data reporting from several departments within Telstra, said consent is contextual because customers attitudes will change over time and on a use case basis.

“Of course, [to deliver a better service]  you’re going to need to understand more about the customer, the customer’s house, the connection, all those sorts of things … And that may be absolutely perfectly fine to one customer but that customer may say ‘actually I’m not ok for that information to be shared in a marketing context’.

Elizabeth Moore, data, reporting and analytics executive at Telstra. Source: Linkedin.

“So it’s very very contextual for individuals.”

Building trust as a “data custodian” will become increasingly important as new data use cases emerge, including with AI, Moore said, requiring increasingly “granular consent”.

Gavin Pearce, chief risk officer at iCare, the NSW government workplace insurer, said privacy should not be seen as a constraint.

“If you want to do great things, you’ve got to do it in the ethical way. And for us, it’s about taking that outside-in view.

“We might see that we’re doing something that’s completely aligned with the collection of the data, the purpose, the use. But if the general public says ‘no, that’s not the case’, then you’re in trouble.”

Privacy ‘pub test’

Pearce said the conversation had shifted from data breaches to “ethical breaches”, where an incident may not have technically contravened privacy laws but still cause alarm in the public.

“The public sentiment or the ‘pub test’ says that you failed. So for us, it’s about how do you get that voice of the customer, how do you get that transparency? And what we’ve done at iCare is actually embrace human-centred design, which is to bring the customer in at the start through the journey, rather than building something and at the very end, bring out the customer and go ‘ta da’.”

Gavin Pearce, chief risk officer at iCare. Source: Linkedin.

“That tends not to work so well.”

All three panelists stressed the importance of communicating the potential benefit of any data use in order to obtain consent. Telstra’s Moore added it was important to also respect customers when they don’t agree on the value exchange.

“A customer could say no, because they genuinely don’t want to share that information with us. We have to respect that … We absolutely have to respect that.”

But many organisations are still only paying lip service to customer privacy and involvement, according to Crosby.

“I would say that there’s a lot of talk and not enough walk,” she said.

With New Zealand preparing for a transition to open banking which will usher in new digital service options from third parties and subsequent consent requirements, systems and attitudes will need to change too, Crosby warned.

“There’s the old and the new. We’re still working in old marketing games with static rules and blanket approvals. And that’s something that [as an industry] we need to get away from and help ourselves using tech and a different mindset about customer to actually enable this optionality.”

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