A ‘privacy paradox’ is emerging around the tension between consumers’ growing willingness to share personal data for commercial use at the same time as their concern about privacy and security is mounting, according to KPMG’s latest Consumer & Convergence Report.

The developing ‘converged lifestyle’ has huge implications around trust, risk and security issues for retailers and advertisers, mobile operators, the financial industry and the way business is conducted in the future. Businesses that grasp the importance of consumers’ privacy and security have an opportunity to get ahead of the pack and enhance their reputations, finds KPMG.

The global survey reveals that UK consumers and businesses are ahead of their international counterparts when it comes to adopting new technologies. Over a third of UK consumers are now using their smart phones as the most frequent means to access web services.

Nearly two thirds of consumers globally are willing to have their online usage tracked by advertisers, up from just half when the survey was conducted in 2008. One of the most surprising trends is that consumers are increasingly happy to allow their online usage pattern and personal profile information to be tracked by advertisers but only if it results in lower cost or free content. Almost half of respondents in the UK said they are ready for such a ‘trade off’; globally the willingness rises to 62%.

UK consumers reveal that there are a number of factors which, if embraced by businesses, would boost trust in relation to data privacy and security.

Key findings:

•Two thirds (66%) say that better disclosure of privacy/security measures implemented by service providers would build trust, while a similar proportion (73%) say the reputation of service provider is important.
•Nine out of ten said that stronger government regulation was a fairly or very important factor towards gaining trust.
•72% would like to see third-party audits/certifications.
•Significant majorities will share emails (80%) and photos (77%), while just 14% would share medical information and just 13% would store investment and other financial information
•44% are very concerned about the potential for credit card information to be intercepted by an unauthorised party; the figure rises to 83% including those who are ‘somewhat concerned’
•86% are concerned about the threat of unauthorised parties accessing personally identifiable information
•85% express concern about receiving unsolicited promotional material

Commenting on the findings, Malcolm Marshall, head of information protection and business resilience at KPMG, said: “Following a series of high profile security breaches, it’s clear that UK consumers are concerned about privacy, yet they are not averse to sharing data with commercial providers altogether. The report shows that UK consumers are developing significant savvy with their personal information: they’re willing to share it but for a price, and that price is free content or services.

“People are embracing new technology more than ever before, presenting an unprecedented opportunity for commercial operators who are able to build consumer trust. The key is how they do this.

“By developing, deploying and promoting robust security and privacy controls, organisations can build trust with consumers so as to encourage more sharing and allow more tailored services. In mobile technology, for example, operators should be promoting security protocols every bit as much as they promote price and quality. We’re already seeing retail banks make a big play in online fraud prevention, and the evidence shows it is working with online fraud falling by a third in the first half of 2011.”

Share Story: