How do the companies we interact with use our data?

Collaborative Post | In an era where our lives are increasingly digitised, the question of how companies use our data has never been more pertinent. From shopping online to scrolling through social media, every interaction leaves a data footprint.
 
But what happens to that data? Understanding this can empower UK consumers to make informed decisions about their digital privacy.

Photo by Christopher Gower on Unsplash

What types of data are collected?

Before we dive into how the companies use the data they collect, it’s good to know exactly what information they keep hold of. This can be divided into five categories:
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Personal Information: This includes details like your name, address, email, and phone number. Companies collect this information to create user accounts, process purchases, and deliver services.
Behavioural Data: Ever wondered why an advert for a product you viewed online yesterday suddenly appears in your social media feed? That’s behavioural data at work. It includes your browsing history, purchase behaviour, and interactions with ads.
Demographic Data: Age, gender, income, education level, and employment status are all examples of demographic data. Companies use this information to segment their audience and tailor marketing strategies.
Transaction Data: This includes the details of your purchases, such as what you bought, how much you paid, and your payment method. It helps companies understand consumer spending habits.
Location Data: If you use mobile apps or GPS services, companies can track your location (if you’ve given permission). This data is often used for targeted advertising and localised services.

How companies use this data

Now that we’ve looked at what data is gathered, we can delve deeper into how this information is used. There are several different benefits for companies, which is why they’ll often ask for information that seems irrelevant to the action you’re taking – for example, asking for your age when you sign up to a newsletter.

Personalisation

Companies use your data to personalise your experience. For example, streaming services like Netflix recommend shows based on your viewing history, while e-commerce sites suggest products you might like.

Marketing and advertising

Data-driven marketing is highly effective. By analysing your data, companies can deliver targeted ads that are more likely to resonate with you. This not only improves their marketing return on investment (ROI), but also enhances your experience by showing you relevant content.

Improving services and products

Businesses can also use data to identify trends and improve their offerings. For instance, feedback forms and usage data can highlight areas for improvement, leading to better products and services. They’ll also be able to see which areas of their website are the most popular – or the areas that aren’t getting many visits at all.

Fraud prevention

Financial institutions and online platforms use data analysis to detect and prevent fraudulent activities. This involves monitoring transaction patterns and identifying anomalies – so your data is used as part of a wider dataset that indicates what the ‘norm’ looks like.

Customer support

​By having access to your data, customer service teams can provide more efficient and personalised support. They can quickly access your purchase history and previous interactions to resolve issues faster.

Photo by Christopher Gower on Unsplash

GDPR in the UK

Data collection in the UK is closely regulated. The General Data Protection Regulation (GDPR) mandates that businesses must obtain explicit consent before collecting or processing personal data. It also grants consumers rights such as accessing their data, correcting inaccuracies, and requesting deletion.

Companies are required to be transparent about how they use data and must implement strong security measures to safeguard it, with non-compliance resulting in hefty fines. All of this means that if you’re not happy with a company storing your data, you have the right to ask them to delete it in certain circumstances. This is also known as the ‘right to be forgotten’.

Making informed decisions

Understanding how companies use your data is crucial in today’s digital landscape. While data collection and usage can enhance your online experience and bring numerous benefits, it’s essential to take steps to protect your privacy. This way, you can use digital services whilst being comfortable with the information that you’re sharing.

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​Disclaimer: this is a collaborative post.