Tag: Compliance

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Getting consent with your Customer Master Data Management Platform (CMDM)

brown wooden i love you letter

If you’re thinking about your first-party data strategy then you are in the right place. The upcoming changes to third-party (3PD) cookie handling accompanied by ever-evolving privacy regulations mean that your organization needs to be privacy-ready!

The debate between your technology provider and your brand about the ethical use of data that is harvested from behaviour on their platforms and currently presented as second-party data (2PD) for you to use, is also under threat as ad platforms like Google and Facebook start talking about no longer making this available.

Marketers need to start thinking about practical strategies and marketing opportunities and first-party (1PD) data likely need to be where you will want to start.

New regulations and new device and platform developments now afford consumers the power to choose who can use their data and which data is available for use. When it comes to collecting data, we’ve definitely entered a more customer-focused era. What’s important now, is making it clear how your customers will actively benefit from sharing their data with your brand.

It is generally acknowledged that user-shared data and burgeoning privacy policies aimed at providing consumer clarity, give consumers control and transparency over their data and its use, in the hands of organizations that they interact with.

First-party data is the information that is collected from your customers and prospects during direct interactions with your business. This could be coming from websites, apps, and even in-store, it can also come over the phone or via paper form transcription.

We’re not talking transactional data here (though that could be a focus), we’re talking about the master data that relates to the identifiable characteristics of the customer.

Every touchpoint your customer has with your business presents itself as an opportunity for you to learn more about them so you can build a stronger relationship and personalize the next experience that the customer has with your brand.

Pretectum feels that’s why it’s important that you consider a CMDM as part of the arsenal of tools that you could use to manage the customer master data, and the consent to manage the customer’s master data.

Some history

It’s worth considering how we landed where we are today. One key milestone in this wresting of the power from faceless and anonymous data providers was the European implementation of the GDPR back in 2018.

In different markets, it has had different implications, but most importantly, if you’re a business doing business in Europe with European customer data, you have to comply or risk penalties.

When combined with the CAN-SPAM Act in relation to unwanted Commercial Electronic Mail – it requires the FCC to issue rules with regard to commercial e-mail and some text messages sent to wireless devices such as cell phones—not email in general; and the Canadian Anti-Spam Legislation (CASL) is targeted at protecting consumers and businesses from the misuse of digital technology, including spam and other electronic threats.

Canadian and US retailers specifically, need to adopt transparency over how they gather and compile customer and prospect data for North Americans.

Alternative ways to think

At face value, all this regulation, the crumbling of the cookie, and the potential disappearance of third and second-party data providers altogether look bad for marketing teams. In fact, it looks bad for all business areas and organizations that depended on these sources to sell, upsell and cross-sell. A full analysis of the yield from spray and pray 2PD and 3PD providers though, might show that the returns of leveraging this data were marginal despite the promises of the data providers.

Where the real treasure lies, is most likely in the data that you already have; and the data that your customers are willingly prepared to give you. Moving to a different model where you make use of first-party and zero-party data (0PD)

Clean and compliant 1PD and 0PD have many benefits for your organization, although it does come with the burden of setting up ways to gather the data and manage it. This is where we think the Pretectum CMDM can be of help.

Some of the benefits include improved customer and prospect targeting. A better understanding of the customer lifetime value (CLV); a stronger understanding of the prospective customer’s intentions and their relative position in the prospecting and opportunity funnel; an overall better tuned and optimizable customer experience with personalization and of course a better understanding of marketing ROI and campaign effectiveness.

Organizations have been trying to forge closer and stronger relationships with customers since the commercialization of the Internet and general availability of CRM, ERP, CDP and POS systems began and these changes to how we collect and leverage audience, prospect, and customer data may be just what the data doctor ordered!.

Moving customer data quality to the front of the line

Before these regulations were introduced, buying 2PD and 3PD was cheap enough and seemingly cost-effective but the downside was the questionable quality of the data.

Bad data would not only result in sales and marketing campaign failure, it potentially also ruined brand reputation with people receiving unwanted messaging and communication.

Implementing a CMDM like Pretectum’s together with your 1PD and 0PD strategy means you always have your pulse on the quality of the data that you gather, and you’re gathering it with a legitimate and approved reason.

Data Quality
Data Quality Overview in the Platform

Driving towards minimally viable data

Although data storage costs are minuscule these days, even at scale, the reality is that many businesses have more data than they know what to do with and a great deal of data is held that will never be leveraged for any meaningful business purpose.

This data duplication, proliferation and burden are improved with platforms like the Pretectum CMDM as it identifies the duplicative data and drives your business operations towards the consolidation of all the data that you have about customers, into a single reference repository that will drive efficiency and effectiveness.

When you have a data governance component that manages the mastery of the customer data record you can now apply more thoughtfulness to that very data’s collection, evolution and distribution. Your customer master data, with the 0PD approach, reveal to your audiences, what you know and what they have shared and empowers your associates to elevate the depth and quality of the customer-partner conversation.

Maintaining just the right amount of data without duplicates, with completeness, currency and consent, moves your business to a model where you have viable data for engaging with the customer but just the right amount without leaving the customer feeling their privacy has been violated.

Keeping it real

When you have an active approach to 0PD you can start providing customers with provable benefits. you’ve given them that essential control over what they share and what you can do with it. You’re allowing them to adjust their privacy settings as their relationship with your business flexes.

You’re doing customer master data management in an intuitive, transparent and straightforward way with your Prectectum CMDM maintaining the change history in the background as you adjust the preferences via APIs using your mobile apps, websites and in-store or POS applications.

All this drives the promotion of consumer privacy and demonstrates robust customer master data stewardship. Internally, this motivates your own people, assisting them in having the confidence to build longer, more meaningful relationships with customers and your customers with your brand.

Contact us to learn more about how we can help

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Deconstructing the Customer

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We use customer analytics to collect and analyze customer data to learn about customer behaviour and preferences. We use that analysis to inform our strategic and tactical decisions and to assist with the formulation of customer-centric recommendations.

This analysis is undertaken to provide answers to many kinds of customer-related questions and can embrace different types of business analytics.

Businesses may employ descriptive analytics to describe the current state of the customer. Diagnostic analytics describes the root cause of a particular customer or business problem.

Using machine learning, artificial intelligence and data science can provide predictive and prescriptive analytics that can be used to suggest the next best action or remediation steps to take to solve particular customer-related challenges, they can also help with forecasting and predicting behaviour.

On face value almost all and any of these approaches to analysing the customer could be used. To be effective however, you need to have the best possible data and the most complete attributes for a customer record.

In breaking down the attributes of the customer it is valuable to know much more than just the customer name, email and address although, these in themselves can suggest a great deal about the customer on their own.

The power of AI, ML and data science can suggest some key attributes related to the customer but what is most valuable is the ability for the customer to offer up this information themselves, voluntarily and as comprehensively as they feel comfortable.

We’re almost all probably familiar with the model that has been used by the financial services industry over the years to assess and assure credit worthiness and reduce risk, many of these data attributes are voluntarily offered up by customers depending on their level of confidence in your business and in particular their confidence in your judicious use of the data in the execution of business sales and marketing activities.

If you ignore the transactional aspects of how you interact with the customer and focus all your energy on the customer master itself, you may in fact find that there is enough there to make some educated inferences for the many purposes of your diverse business needs. If you choose to append aggregated transactional data that can also be useful but like all things, this needs to be refreshed regularly in order to prove most valuable.

Click on the image of the ecosystem of connectable platforms for a better view
Click on the image for a better view

So where does the Pretectum CMDM platform fit into the vision for an elegant and useful deconstruction of the customer master?

The first element to consider is security. Every tenant of the Pretectum CMDM operates in their own compartmentalized client of the platform.

Secondly, even within the domain that you have, you have your data and users segregated by business area. This means that the Accounting team can operate completely separately from the marking team but they also have the potential to use the same data that perhaps comes from the customer account management team.

You can determine exactly what data you want to hold in the Pretectum CMDM store. All the data you store can also be augmented with either self-service data from your actual customers as well as data that comes from trusted data providers. All the data is stored in a secure and encrypted way that is visible and accessible to only those teams and individuals that you grant explicit access.

To learn more about the Pretectum CMDM advantage reach out today!

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Factors to consider in relation to Customer Master Data and being compliant

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The growing number of quality standards and regulations (industry-specific or not) mean companies must meet certain compliance criteria directly or indirectly impacted by the quality of data in the systems.

Businesses face many regulatory frameworks and potential risks that require the maintenance of extensive reporting mechanisms and specific processing and handling activities around critical customer master data such as details related to bank accounts, contracts, and contract conditions. In the finance, Insurance, retail, health and pharma segments, regulations vary from country to country but the message is largely the same – you need to know what data you have and you need to be looking after it properly.

Failure to take necessary steps to protect the data can lead to a variety of punitive measures being imposed by the authorities. This is separate from any personal liability claims that might be brought by individual members of the public in relation to incorrect or inappropriately handled customer master data. Appropriate management of customer master data is therefore essential not just to ensure that there are no negative financial implications but also to ensure the preservation of the organization’s reputation.

How a CMDM helps with compliance

A customer master data management system gives businesses a single reference point or single customer view. This can be of help when trying to meet compliance expectations by describing the records held, the content of the records and enumerating the evolution of those records over time from origin to current state.

A well-designed master data management platform makes it easier for businesses to audit and standardize their view and understanding of the customer across the many data repositories that they might have including data warehouses, transactional systems and other data sources that might use different technologies in different business units and geographies.

A centralized customer master data management platform offered under a PaaS or SaaS model is a continuous duty system by nature and backed up in alignment with best practices and all necessary regulatory requirements. Features that you can expect include the identification and optional removal of duplicate records, the maintenance of strict standards in relation to data quality and the presence of a user permissions hierarchy to ensure that only those who should have access, do.

Right to Erasure

Under European GDPR policy, the ‘Right to Erasure’ gives users the right to have their records erased from databases to meet privacy requirements. When you have the customer master stored in many places this is a difficult requirement to meet.

It is also amongst the key components under California’s CCPA framework and other frameworks of a similar nature exist in other geographies globally.

Removing customer information from your records, or even correcting it, is more straightforward when you have a centralized customer master data management system. In some cases, people want to remove only publicly recognizable information from the available channels, but this can become tedious if such information is expressed differently in a different system with no interconnected golden thread that forms a unified reference point.

For either removal, correction or suppression of data, having a master data management reference point is operationally more efficient and better supports the ability to be compliant. The CMDM platform offers that unique point of reference for each database. This means that compliance activities can quickly identify data quality issues, make the necessary changes and get those corrections syndicated across departmental and downstream systems in the organization.

KYC compliance (Know Your Customer)

All financial sector organizations must submit customer information to regulatory authorities, often before providing the person or organization with financial services. Regulators are quite strict on the importance of customer record quality; incorrect measures in an organization can risk exposure to compliance penalties, places assets at risk and also introduces reputational risks. The Dodd-Frank act overhauled the US financial regulation system and while some of the act’s regulations were rolled back by the Trump administration the new regulations being implemented at the individual state level and in Europe provide sweeping new protections for citizens that organizations need to subscribe to. 

Financial institutions and Fintech companies that build secure systems and processes to collect and submit KYC data to authorities enjoy benefits over their competitors not only in terms of the quality of the data that they hold, but also the costs associated with maintaining their compliance, and of course the risks associated with specific accounts. A CMDM platform can help businesses centralize KYC information and make it easier for them to meet regulator screening requirements. According to Deloitte’s 2020 banking and capital markets outlook, “wealth managers are grappling with the rising cost of compliance and increasing focus on KYC/AML and data protection” something which a CMDM can surely help with controlling.

Meeting the requirements of compliance rules is also often time-consuming for businesses. For businesses that have been in the business for decades, this is particularly hard when they have ageing infrastructure and long-established customer data management practices.

Enterprise-level master data systems prioritize security and industry compliance, admittedly at a cost, but this cost is often more transparent than the many hidden costs associated with ad hoc and unstructured, even perhaps uncoordinated data management practices. CMDM helps businesses implement and comply with data quality standards and implement policies on demand.

If you’re challenged by compliance worries around your customer master data management, why not reach out to Pretectum today and find out how we can help.

RJ