The impact of privacy-enhancing technologies (PETs) on business, individuals and society

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Jon Jacobson, Chief Executive Officer, Omnisient

• As more data is collected and shared, the risk of data being accessed or stolen by unauthorized parties increases.
• Privacy enhancing technologies (PETs) protect data and eliminate the need to use personally identifiable information for data analysis.
• With their ability to protect individual privacy and to eliminate the risk of data breach and deprecation of IP, PETs are critical in enabling organizations to leverage the deluge of data accessible to them.

Privacy Enhancing Technologies (PETs) unlock the potential for using consumer data to drive positive results for businesses, individuals and society. In this piece, we explore what PETs are, why they should be adopted by organizations and how they can drive a positive impact on businesses, individuals and society.

As we further integrate digital technologies into our lives, the avenues for data generation and collection multiply. Every click, every scroll, every transaction and even every movement today generates data at an incredible rate. Over 90% of the world’s data has been created in the last two years. This deluge of data can be a treasure trove for businesses and society, driving innovations and providing solutions to some of the world’s most pressing challenges. It also, however, poses significant privacy risks to individuals and liability risks to organizations.

PETs overcome these risks by protecting data and eliminating the need to use personally identifiable information (any information that could be used to identify you) for data analysis. PETs provide the tools to harness the power of consumer data without compromising individual privacy. As we grapple with the challenge of unlocking the value of data while protecting privacy, PETs become essential enablers.

The risks of data collaboration and the value of PETs

As more data is collected and shared, the risk of data being accessed or stolen by unauthorized parties increases. A recent IBM survey concluded that the average cost of a breach in 2023 will cost $4,5 million.

Global privacy regulations and growing concern over consumer privacy coupled with the risk of data breaches are accelerating the adoption of PETs by data-driven businesses. As a result, the PET market is expected to reach $ 2.4 billion in 2023 and grow by a CAGR of 27% to reach a value of $ 25.8 billion by 2033.

This is not surprising given that PETs deliver the freedom to draw insights from another business’s sensitive data without running the risk of a data breach, deprecation of company IP or contravention of global privacy regulations, such as the European Union’s General Data Protection Regulation.

The benefits of privacy-preserving data collaboration

By integrating PETs into data collaboration, organizations ensure that sensitive data can be analyzed and used by multiple parties, while still ensuring it remains confidential and protected from any risk of data breach.

Below are seven examples of the many applications and benefits of privacy-preserving data collaboration:

1. Healthcare research

By preserving the privacy of patient data, researchers from different institutions can collaborate to study diseases, genetic disorders or the efficacy of treatments without compromising patient privacy.

2. Financial inclusion

Financial institutions can safely collaborate to extend financial services to underserved populations, such as those without a traditional credit history, by securely analysing consumer data from new sources, such as retailer shopper data.

3. Social welfare and public benefits

Government agencies can collaborate to understand the effectiveness of welfare programmes and optimize the allocation of resources, while ensuring the privacy of citizens.

4. Economic growth and development

By analysing anonymized data on consumer spending, employment and other economic indicators, governments and organizations can develop strategies to boost economic growth, create jobs and address inequalities, without compromising individual financial data.

5. Crime prevention and public safety

Law enforcement agencies can use anonymized data from various sources to study crime patterns, predict crime hotspots and deploy resources more effectively, ensuring the privacy of individual citizens.

6. Enhanced educational strategies

Educational institutions can collaborate to understand student performance, study outcomes of different educational interventions, and predict dropout rates without revealing individual student identities.

7. Consumer protection

Regulatory bodies can collaborate with businesses to identify and combat fraudulent activities, scams or unfair practices in the market without directly accessing sensitive consumer data.

By ensuring the protection of individual privacy, PETs free organizations from the risks associated with data collaboration and accelerate the unlocking of benefits to businesses, individuals and society.

Real-life breakthroughs in privacy-preserving data collaboration

Let’s look at two specific real-world use cases for privacy-preserving data collaboration platforms that are already breaking ground:

Accelerating data monetization and partnership marketing

Privacy-preserving data collaboration platforms provide the trust and protection required for data sellers and buyers to avoid lengthy compliance, risks and challenges historically associated with data partnerships and they enable the rapid evaluation of data to get to commercial agreements faster.

From our experience, we’ve seen the average time required to deliver value on these types of partnerships go down from two years to three months by eliminating the need to exchange sensitive data.

Alternative data strategy for financial inclusion

Financial institutions can make use of the collective consumer intelligence shared between them and consumer businesses to build new predictive models to reduce risk in extending services to individuals with little background information, such as credit history.

For example, we’ve enabled a leading retail grocer to act as a data bureau and deliver credit scores directly to banks in South Africa for credit applicants who are also among the grocer’s loyalty shoppers. This has enabled the scoring of 8 million individuals, of which 3.2 million now qualify for credit that would have previously been declined due to lack of credit history.

The imperative for PETs

With their ability to protect individual privacy and to eliminate the risk of data breach and deprecation of IP, Privacy Enhancing Technologies are critical in enabling organizations to leverage the deluge of data accessible to them. The question isn’t whether they should adopt them, but rather, can they afford not to?