Importance of Data Ethics for Enhancing Digital Trust

Data ethics can help improve digital trust by ensuring that data is collected, stored, and used responsibly. Companies should ensure they have data collection policies in place that only collect what is necessary for their purposes while also respecting the privacy of their users.

Additionally, organizations must employ strong security measures regarding storing this data to prevent unauthorized access. Data should not be shared without first obtaining consent from the individuals involved.

From 2010 to 2020, the amount of data created, captured, copied, and consumed in the world increased from 1.2 trillion gigabytes to 59 trillion gigabytes, an almost 5,000% growth. - Forbes

Recognizing the operational complexities of data management, organizations have turned to addressing these issues head-on—from constructing and maintaining effective data lakes to seamlessly integrating technology-savvy professionals into existing teams. Learn more about our solutions for the Manufacturing industry.

While the ethical implications of data management are vast, only a few organizations have taken proactive measures to consider and address them. Such efforts could bring profound consequences and duties for all parties involved.

If bias is present in an algorithm's training data set, or if a breach in data security occurs and personal information is sold without consent, companies can face considerable reputational damage as well as financial losses. Moreover, board members may even be subject to legal repercussions.

Organizations that are collecting and handling user data will need to take a more ethical approach as technology matures, collection and handling of data. The traditional data governance frameworks and risk mitigation strategies are insufficient to monitor these enormous data streams where data is collected, combined, and shared.

Today, businesses can gain detailed insights, run real-time data analysis, and isolate the data risk classes to develop better countermeasures.

These classes include :

  • Unethical or even illicit utilization of data insights
  • Intensifying biases that aggravate socio-economic issues
  • Use of data for purposes that were not agreed upon by the original disclosers without their consent

As data ethics becomes increasingly crucial across various sectors, understanding its implications is vital. For insights into how we support the retail industry, visit our Retail industry page.

Why do organizations need data ethics in place?

Every digital device on an internet connection leaves its digital footprint, collectively known as digital datasets. Modern organizations are building their economies and putting their operations' futures on these massive data sets.

The World Economic Forum estimates that by 2025, more than 463 exabytes of data will be created each day globally. If the organization doesn’t have ethical data practices in its decision-making process, all the risks, as mentioned earlier, will go unnoticed, eventually causing a fall in brand loyalty.

How does unethical data monitoring hurt business?

Let’s take an example here to portray the degree of mistrust or damage unethical data monitoring can do to the brand and its users.

A dating app tasks its developers to increase the app time usage for its users. After their data analysis, the developers noticed a powerful connection between engagement and ethnic or racial biases. The developers, tasked with improving business metrics, now start working on a new match recommendation algorithm predicting and reinforcing these biases. Carrying out the said changes will create the necessary pull for the customers to stay in the app longer and go for the in-app purchases. Here, the competition is to increase app time usage for the user base and push them towards the in-app subscription model. Hence, growing the business’s profit margin.

This example illustrates that the digital economy relies heavily on bad judgments due to the extreme level of competition. More often than not, these judgments lead to massive data ethics failures.

Multiple risks are associated with the ethical use of data, and legacy measures are no longer sufficient to guide the technological world properly.

What’s the solution, you may ask? Develop more robust data ethics controls embedded in the data supply chains that control the users rather than the receiver. Only then will organizations be able to create “digital trust.”

Defining digital trust

Let’s start with the most important question: What is digital trust, and why is it essential for modern business owners? Digital trust is a widely accepted belief that a brand must always be reliable, capable, safe, transparent, and truthful in its digital practices.

It is not a far-fetched thought to say digital trust is challenging to build but easy to lose, making it a critical differentiator for the betterment of the digital economy. Digital trust is often given to companies that have proven to their users that they provide:

  • Safety
  • Privacy
  • Security
  • Reliability
  • Data ethics

When users click on the "I accept the condition" button while using a company's product, they are not allowing their data to be used in an unethical manner. Instead, they are confirming their digital trust in the business.

Artificial intelligence (AI) and machine learning algorithms are becoming increasingly prevalent in today's digital age. With the explosion of big data, implementing ethical data practices has become more critical than ever. 

Data governance should be put in place to ensure that the data collected and analyzed is accurate, secure, and used for fair purposes. 

Additionally, businesses must ensure that machine learning algorithms are free from bias and discrimination. By implementing data ethics and good data governance practices, organizations can develop AI and machine learning algorithms that are both efficient and ethically sound. 

Ethical measures go a long way toward increasing your brand value

84% of consumers identify good data security and protection of personal information as the key characteristics that they look for when deciding where to spend their money.

The more digital trust a business receives in the modern market, the more users will flock to use its services and products. For instance, in various industries, including the logistics industry, ethical data usage involves protecting customer privacy and data integrity.

And how can businesses do so?

As the world moves more towards digitization, C-level business executives are trying to create a sense of security, safety, privacy, and reliability among their users. Business leaders, especially CISOs, have started focusing their attention on removing the threat of cyber-attacks and protecting private data from unlawful access. This enables businesses to take proper security measures by adopting a zero-trust model.

The zero-trust model decreases opportunities for hackers to access secure content by limiting privileged access to the network or the machines in that network.

Digital trust enables users to choose a company that provides better services without abusing their data. Users will, therefore, utilize the services of companies that have established themselves as trustworthy.

Digital trust helps business growth

65% of security leaders agree that the role of privacy plays a large part in achieving a strong cybersecurity posture, and 73% currently have a privacy leader in place. – Ponemon Institute’s fourth annual study on “The Cyber Resilient Organization.

Today, data has transformed into a precious currency, and business leaders are starting to see it in the same manner. The advent of digital technology has enabled businesses to demand more trust from their customers regarding data collection and analysis.

We all know that every website tracks how consumers spend their time on various web pages through digital breadcrumbs.

Meanwhile, headlines about technology-based issues like security hacks, unauthorized surveillance, improper use of personal data, lack of information transparency, and the spread of misleading information have made users panic-stricken.

These incidents create fear and distrust in customers, employees, partners, investors, or regulators and significantly damage an organization’s reputation in an already competitive market.

The way businesses handle user data while collecting, aggregating, analyzing, and monetizing plays a crucial role in their overall reputation.

Companies must start looking beyond dollars and diverting their focus more toward data ethics by developing a data supply chain framework that enables businesses to gauge their current ethical practices. In order to gain the digital high ground, businesses must start battling to increase their customers’ trust in themselves.

data supply chain

The picture explains various terms and definitions in the data supply chain. 

For businesses to use data ethically through the data supply chain, it is crucial to change the way it is looked upon within the organizational process. Companies must add an extra layer of scrutiny to make data ethics enhance digital trust.

Top 8 principles to help businesses apply ethical data practices

The following infographic will help clarify the need for bringing better ethical values while collecting, analyzing, and using the data sets.

Businesses must have more robust data ethics principles in place to achieve digital trust. In this section, we outline some of the principles that will help enterprises create the much-required code of data ethics.

Data Ethics Micrographic_1

1. Respecting the data

Big data produces riveting insights about the general population, which creates a large part of the user base for many enterprises. When a customer shares personal information with a business, such as their address, age, location, etc., maintaining privacy and keeping it secure falls upon the business itself. Insights derived from this data impact business in various manners. However, the potential damage it can cause to the end-users has to be the companies’ central point of consideration.

2. Having accountability for the use of data sets

Modern-day data professionals must use data parallel to the users’ understanding and intentions who have agreed to share it with the businesses. There are various regulations placed for governing datasets based on data status,

  • Public data
  • Private data
  • Proprietary data

What matters more here is what companies do or are doing with the datasets. When data is repurposed for research and industry use, it promises more returns and better benefits for data analytics.

3. Checking the past use of data

Every dataset and accompanying analytics tool has historical information attached to decision-making and must be auditable. This includes the systems used for tracking

  • The context of the collection
  • Methods of consent
  • Chains of responsibility
  • Assessments of data quality and accuracy

4. Matching the privacy safeguards with expectations

Data subjects have a range of context-dependent expectations about the privacy and security of their data. Developers and data professionals must consider these expectations and align all the privacy safeguards with these expectations.

5. Understanding and following the law

The modern world is riding high on digital transformation as it has become the standard evolutionary path for businesses. Laws have been lagging to keep up with the pace of digital innovation and change, which means the existing regulations are often poorly calibrated and open to failure. To make good use of data ethics, leaders need to define more robust compliance frameworks.

6. Don’t collect data just for the sake of it

Businesses must consider the possibility that collecting just the necessary data will allow faster, more accurate, and better analysis.

7. Explaining the data collection and analysis process

Businesses must maximize transparency while collecting data. This will minimize significant risks that arise when data moves through the data supply chain.

8. Internal ethical review and robust governance

Data ethics presents various organizational challenges that cannot be resolved by compliance regimes alone. When introducing new products, services, or research programs, organizations must enact efficient, consistent, and actionable data ethics review practices. They must have internal peer-review practices that mitigate risk and an external review board that will contribute to public trust.

Data ethics is a growing priority for CISOs (Chief Information Security Officer)

27% of business executives view security initiatives as having a negative return on investment. – CSO Online

Data ethics goes beyond ensuring compliance with laws. It provides responsible collection, storage, use, and protection of personal information to preserve digital trust.

By 2025, worldwide data will grow by 61% to 175 zettabytes. - IDC

Now, that’s a huge estimate that businesses and users need to consider. Users will be the main contributors, but companies will be both benefactors and facilitators as they need user data to refine their products and services.

More importantly, they must ensure that they build enough confidence in their user base by having the best data ethics principles.

They can successfully do so by having ethical algorithms and automation in place. Online shoppers are aware that their purchase histories influence the discount offers poured onto their apps, emails, or online messages.

E-commerce brands often offer similar items at different prices based on location and other factors. Pricing depends on tax, transportation cost, and many other reasons. This same approach can reap better benefits for businesses when deployed carefully.

Businesses can accomplish this via automated sense-and-respond systems by including previously collected data for faster and better decision-making.

The bottom line: Data ethics is the key to maintaining business legacy

The power and peril of data analytics are that “present” data collection will be used for unpredictable purposes in the “future.”

In this technology-driven modern era, data is the virtual currency employed for unlocking unparalleled success. Data ethics must be the center of organizational focus, and for that, modern business leaders

  • must take preventive measures
  • thwart the risk of exposing sensitive customer data
  • refrain from unethical use of customer data

In doing so, they’ll

  • gain the trust of stakeholders
  • reap better business benefits
  • position themselves for prolonged success

Many companies have yet to recognize the power of disruption. This is where award-winning digital transformation-enabling partners like Rapidops come into the picture.

For the past decade, Rapidops Inc. has helped businesses understand the positive and negative effects of technology. In doing so, we have created a plethora of opportunities for our clients to grow at an exponential rate. The same efforts have been recognized by Inc. 5000 and CBJ.

We work with business leaders and help them see the potential consequences of employing disruptive technologies throughout their organization. If you want to learn more about our work or sit down and discuss a product strategy, we will be happy to do so.


Saptarshi Das

9+ years of expertise in content marketing, SEO, and SERP research. Creates informative, engaging content to achieve marketing goals. Empathetic approach and deep understanding of target audience needs. Expert in SEO optimization for maximum visibility. Your ideal content marketing strategist.

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