Overcoming risks in data monetisation – data liability, brand image, data privacy

As automotive players gather huge amounts of data and attempt to analyse it to add value and revenue to existing products and businesses we encounter a variety of potential risks along the way. It is important for automotive players to be aware of the potential pitfalls the internet could hold for your core business and brand strength.

When customers sign up for social media, infotainment or search services they expect that these services will make their lives easier and they understand, for the most part, that in exchange they will be giving up some small amount of privacy in the name of their data. However, this ‘contract’ does not extend to buying and owning a car… yet. The priority for automakers must unequivocally be: “Do no damage to the core automotive business.”

Data Liability

As Roger Dewey and Leigh Ann Ryals outline in the Automotive Data Monetization Report 2015-2016 one big issue that companies face is the liability risk of collecting and holding car data but not undertaking analysis. Automotive and commercial fleet companies that have collect data and could have identified potentially dangerous problems can be held liable for not acting on that information, even if analytics were not performed. This situation presents a dilemma, in that historical data can identify patterns and trends to improve an automobile but also exposes the automotive company to questions such as what did they know, when did they know it. Because of this liability risk issue, many companies are very careful about the data that they collect, keep and analyse.

Brand image

Some data or connectivity related services may be easily monetised, or may fit into a strong return on investment model but will not align with the brand image the company is trying to project. An example of this is automotive financing; connectivity can reduce the financial risk to car loans. In the area of technology called “starter interrupt” (PATA). With the telematics device in the car linked to vehicles ignition, it can disable the vehicles ability to start if payments are missed as well as locating the vehicle via GPS.

This system allows people with low or poor credit scores to qualify for a loan but observed from a different angle this could be viewed as a prepaid service – instead of buying a car, a consumer buys the transportation the car offers and the finance company maintains the service as long as loan repayments are kept up. New research undertaken by TU-Automotive and M2VM suggest that carmakers often respond that the starter interrupt feature doesn’t sit well with their brand image and is more typically associated with the dubious end of the car market.

Data privacy

Telematics and the development of the connected cars are generally seen as having numerous benefits. However, when it comes to privacy, benefits become less clear. The obvious message is that data must be handled with great care and the laws of each country must be upheld. In February 2015, Data Informed published an article titled “Vehicle Telematics puts Big Changes in the Fast Lane” in which author Duncan Ross, director of data science at Teradata International and a founding director of the Society of Data Miners, cited: “There were outcries in the Netherlands when a satellite navigation device manufacturer started sharing data on speeding locations with police, even though the information was anonymised so that individuals could not be detected.”

In an article in the CIO Journal published in July 2015, John Lucker wrote companies need to be extremely cautious when approaching data collection and should  start by “assessing whether they have the legal, statutory , and/or ethical right to market consumer data – and don’t move further without the proper rights and protections in pace.”

He continued: “With the organisations monetisation effort in mind, legal teams will need to scrutinise and potentially revise end user license agreements (EULAs) and privacy policies concerning the data on which the monetisation effort is based.”

When thinking about privacy, the most sensitive information relates to a drivers identity and their activities. Restrictions and other protection measures are in place to guarantee all personal details about a driver remain anonymised. Companies must always navigate regional privacy law when attempting monetisation efforts with data, firstly to adhere to the rule of law but also to protect the future of their services and prosperity of their brand. As we have seen recently with the emissions scandal, trust in a brand and its products should be of paramount importance.

To receive the full research and analysis on challenges of working with data in automotive services download the full Automotive Data Monetization Report 2015-2016

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