Consumer data stored by your CRM software platform, and its harvesting and use, will no longer be completely under your company’s control. The regulators are coming.
The next generation of Customer Relationship Management software will allow businesses to use data analytics to gain deep insights into customer motivations and activities that drive sales and business relationships. But many privacy advocates and their allied legislators see the data as belonging more to individuals than corporations even if it is stored in databases.
New regulations in California – which will affect tech companies like Google and Apple headquartered there – and a stringent date privacy law in Europe are making it tougher for companies large and small to manage their stored data while staying within the letter of the law. And it’s now up to CRM platform developers to help the businesses do so.
More Regulation in Europe
The trend towards tighter regulation is more pronounced in the European Union than the United States. There, regulators have levied substantial fines on Google, British Airways and other major corporations for data breaches. And the EU enacted a stringent data privacy law in 2016 that regulates the transfer of personal data outside its borders.
In the United States, California legislators enacted a consumer privacy law that places all tech companies headquartered in the state under regulation. And lawmakers in Congress are beginning to talk about the needOpens a new window for stricter data laws after a series of spectacular breaches, but it’s uncertain whether any legislation will emerge in the near term at least before the 2020 presidential election.
Data security is also an issue for US-based companies such as Marriott hotels and Uber, which have been hit by high-profile data breaches that impacted their relationships with customers and their money.
The travel industry seems to be targeted for much of the scrutiny, partly because it uses personalization software as an element of its lure to customers. Even smaller operators like individual hotels now have the digital tools to develop sophisticated, tailored relationships with consumers connected by the Internet.
But the more data you hold on a client, the more data for bad actors to steal.
Travel Industry Affected
The EU’s General Data Protection Regulation, or GDPR, while intended mainly to protect Europeans is having an immediate impact on American travel firms that handle data of the millions of European tourists who visit the United States every year. This is causing some companies to revisit the way they manage and store data.
For the CRM buyer trying to stay ahead of the game, it’s in your interest to conduct a review of available systems from the perspective of the new data security requirements. It’s only a matter of time before individual states and perhaps Congress legislate tougher data protection laws. Some CRM platforms, like GigyaOpens a new window , are already optimized for better data protection strategies.
This emphasis on data protection within CRM is already bearing fruit for some providers located in Europe and finding plenty of new online customers in America.
Selligent Marketing CloudOpens a new window reported in August that it has seen a 60% yearly growth in the United States in the last 12 months, and recently launched a self-service Consumer Information Management tool.
Key takeaways:
- Companies should upgrade their CRM systems as state and national governments start to enact legislation that will place them under regulation with punitive fines for data breaches.
- While much of the focus has been on European regulations, signs are growing that America eventually will enact similar regulations.
- Not all CRM platforms make it easy to comply with date privacy regulations, and concerns exist that CRM data can be accessed by bad actors, resulting in multi-million dollar fines as well as the public embarrassment of data breaches.
- The American travel industry is at the forefront of these requirements because travel agents and airlines store and manage data of millions of Europeans traveling in the United States.