US Luxury Sector Must Become More Educated Over Clients' Private Data - Study

Tom Burroughes Group Editor September 1, 2021

US Luxury Sector Must Become More Educated Over Clients' Private Data - Study

As wealth management is, in some respects, a part of the luxury professional services industry, findings from this survey should be relevant to a wide audience.

It has been revealed that businesses working in the US luxury sector aren’t always as aware of their clients' data privacy rights as they should be. At a time when information privacy is a major concern in wealth management globally, findings from the Luxury Institute may resonate with bankers, wealth advisors and other industry professionals. 

The Luxury Institute surveyed 27 senior-level members of its Global Luxury Expert Network (GLEN) to understand their views about handling personal data and sharing it with high-end goods and services brands. (The fieldwork was conducted by DataLucent, a personal data exchange.)

The sample of anonymous GLEN responses is qualitative and directional; it is the equivalent of conducting approximately four focus groups of eight participants, the Institute said.  

When asked about expectations of consumer brands that collect their data, the top five most important factors include: ask for my written consent before they collect my data (78 per cent), do not sell my data to other parties (69 per cent), secure my data and protect it from hackers (65 per cent), be transparent about the personal data they are collecting (61 per cent), and make sure my data is always under my control (48 per cent) which is also tied in rank with inform me if a breach occurs and tell me how to protect myself (48 per cent).

The expectations of brands using their data for personalization (44 per cent) and providing fair value rewards and incentives (35 per cent) are lower in rank in the initial part of the survey, the Institute said.

“These results indicate an initial, unaided, low awareness on the part of luxury experts as to who owns their personal data. It is clearly an opportunity to educate all luxury executives and associates, at all levels, on the rightful ownership of personal data,” it continued. 

"The right to consumer data access and portability is becoming universal for all consumers. Educating executives and customers about their data rights - and about the benefits of safely sharing data directly, under privacy protections plus copyright and licensing laws, at fair value - will establish a new currency between companies and consumers that will build loyalty and dramatically increase mutual lifetime value," Brad Davis, co-founder and chief executive at DataLucent, said. 

With respect to their knowledge as to ownership of their personal digital platform data (which legally consumers own), initially, only 44 per cent of those questioned said they own their data, 30 per cent said the platforms own the data, and 13 per cent believed that they and the platform co-own the data (only true for a very small per cent of data).

Respondents were then informed that they do, in fact, own their digital platform data, and reassured that they would maintain control of their data. They were also assured that their data would be secured, remain under privacy compliance, and never sold or shared without permission, while being provided with fair value rewards and benefits. Once fully informed, 74 per cent of luxury executives would license their data to luxury and premium brands they trust. Another 21 per cent are not sure, while 4 per cent would not license their data. This indicates that even at senior levels of luxury, a large majority of executives have a high level of trust and see advantages in licensing their data.

When asked to express which digital platform data they would be most willing to share with luxury and premium brands, 59 per cent would share LinkedIn data, 55 per cent Facebook, 50 per cent Instagram, 36 per cent Amazon, and 27 per cent Google.

Register for FamilyWealthReport today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes