By Jay Given, VP, Retail & Brand Strategy, Affinity Solutions
In recent years, consumer privacy has taken center stage in the digital media and advertising world. As of January 2025, 20 U.S. states have enacted comprehensive data privacy laws, with at least 40 additional states actively considering similar legislation. The Federal Trade Commission (FTC) has been vigilant in enforcing privacy standards, bringing numerous cases against companies for illegally obtaining or misusing consumer data exceeding $1 billion in fines since 2020. The on-going drama around the ownership and use of TikTok has further thrust conversations regarding data privacy into the spotlight with headlines like Should You Even Care If TikTok Has Your Data?, and Banning TikTok: Turning point for U.S. data security or threat to free speech?
This focus on data privacy and security underscore a fundamental truth: the era of leveraging consumer data without explicit consent is ending. For companies, sourcing privacy-compliant, consented data is not just a regulatory requirement—it’s a strategic imperative.
Consumer Trust: A Fragile but Essential Asset
While companies are required to disclose information about data use, most people are unaware about how their data is being used, leaving them confused and distrustful.
As many as 81% of Americans express concern about how companies use their data especially as technology to collect valuable personal information grows more seamless (i.e. location tracking, connections to wearable devices, website tracking tools, etc.). Public scrutiny has created an environment where trust is both fragile and vital.
For businesses, trust isn’t just a “nice-to-have.” It’s foundational. Companies that fail to prioritize privacy risk alienating their customers, tarnishing their reputation, and facing steep legal penalties. For example, in 2023, a major social media platform faced a $1.3 billion fine under the European Union’s GDPR for transferring user data to the U.S. without sufficient safeguards. Cases like these only further create friction between businesses and consumers and contribute to an environment of mistrust.
Companies looking to fuel data-driven insights must first commit to ethical and transparent use of consumer data.
Consent as the Cornerstone of Ethical Data Practices
At its core, consent is about transparency and choice. It allows consumers to understand what data they’re sharing, how it will be used, and what value they will receive in return. This clarity isn’t just good for consumers—it’s essential for companies. Consented data provides a solid foundation for ethical business practices and ensures compliance with privacy laws.
When consumers see tangible benefits, such as cash back rewards or personalized offers, they’re more willing to share their data. This value exchange is key. In fact, nearly 50% of consumers indicated they were happy for their data to be used in order to receive more personalized services and experiences in a recent PWC survey. For companies, the value exchange is even more appreciated. Developing trust with customers has “a direct and positive impact on financial performance” with 93% of executives in the above survey noting the exchange of data and incentive creates a virtuous circle between trust and revenue.
In this win-win ecosystem, companies can use accurate, deterministic data to deliver value, and consumers feel empowered and respected.
The Risks of Non-Consented and Non-Deterministic Data
Despite the benefits of consented data, many companies still rely on probabilistic data based on inferred patterns of likely behavior. Collecting this type of data is often easier and cheaper because it’s based on assumptions and calculations about the probability of certain actions. For example, those who browse the baby section of a website are likely new parents. However, relying solely on this type of data carries significant risks:
- Accuracy Issues: Consumer behavior doesn’t always follow probabilistic patterns. Someone searching for baby products may simply be looking for a gift. Non- deterministic data often leads to inaccurate targeting, resulting in wasted marketing spend and poor ROI.
- Legal and Financial Consequences: Using data without proper consent can lead to fines, lawsuits, and increased regulatory scrutiny. In 2024, a mobile advertising company faced a $10 million FTC fine for collecting and selling sensitive geolocation data without informing users, enabling the tracking of individuals’ movements to sensitive locations like places of worship and healthcare facilities.
- Loss of Trust: Consumers are quick to abandon brands that misuse their data, and trust, once lost, is difficult to rebuild. As many as 71% of consumers have said they would stop doing business with a company for sharing their sensitive data without permission, underscoring the long-term risks to brand loyalty.
For fintech companies, where trust and transparency are paramount, these risks are magnified. The sensitive nature of financial data makes it even more critical to source information ethically and securely. Investing in deterministic data now can help companies avoid unforeseen costs later while also helping to build a strong reputation for respecting consumer privacy.
Deterministic Data: The Competitive Advantage
Deterministic data—information collected with explicit consumer consent—is the gold standard. It offers several advantages over inferred data:
- Precision: Deterministic data is based on verified actions like real purchase transactions, loyalty program redemptions and location data making it highly accurate for more precise targeting and personalized offers.
- Efficiency: With clearer insights derived directly from consumers, companies can create more effective campaigns and optimize resources for maximum ROI.
- Compliance: Sourcing consented data ensures alignment with privacy regulations, reducing costly legal and reputational risks.
As privacy regulations evolve and consumer expectations grow, companies that embrace deterministic data practices will remain durable in the marketplace. Companies that build their reputations on trust and transparency “outperform their peers by up to 400% in terms of market value.”
The Path Forward: Building a Privacy-First Ecosystem
The shift toward privacy-first strategies isn’t just a regulatory requirement—it’s a cultural shift. Consumers are growing savvier and discerning about how and where they consent to data use. If there is no perceived value, there is no incentive for them to share personal information.
Companies must lead the way by fostering consented, deterministic data from their customers by offering clear incentives to share and demanding the same from their second-party or third-party providers to embed privacy into every aspect of their operations. “By shifting the focus from mere compliance to the responsible use of data—integrating privacy, consent, and governance into their data infrastructure—marketers can foster consumer trust while enhancing customer experiences,” says Blake Brannon, Chief Product & Strategy Officer at OneTrust.
This approach isn’t just about avoiding risks—it’s about creating value. By offering rewards in exchange for data, businesses can build trust and loyalty while delivering meaningful benefits to consumers. In the financial technology sector, where trust underpins every transaction, this model is particularly effective and necessary.
Conclusion: A Call to Action
The future of data is consented, transparent, and privacy compliant. Businesses that prioritize consumer trust and value will not only navigate the changing regulatory landscape but also thrive in a competitive market. The time is now for companies across industries to adopt ethical data practices and reimagine the value exchange with consumers. Together, we can create a future where privacy and progress go hand in hand.
