Key Questions Answered on Data Ownership, Sovereignty, and Regulations Within CX

Martin Taylor, Co-Founder and Deputy CEO at Content Guru, breaks down some of the challenges being created by increased volumes of data, how organisations can overcome them, and the steps that must be taken to succeed in the next phase of the data revolution.

We are surrounded by data, and volumes are rising rapidly. Every digital action we take, whether that’s making a purchase, completing admin tasks, or making a Google search, generates information.

In fact, 402 million terabytes of data are created every day. Data on this scale creates a huge opportunity for Customer Experience (CX) as departments are now handling more information than ever before.

Ultra-granular data is being used to build a bespoke picture of customer behaviour and demands, providing a unique opportunity to create seamless, hyper-personalised experiences, powered by an unprecedented understanding of the customer. However, with opportunity also comes significant risk.

Why is The Growth of AI And IoT Creating New Data For CX?

AI and Internet of Things (IoT) technologies are increasingly being leveraged in CX, generating unprecedented volumes of personal and operational data in real time. As a result, businesses will now have to manage data correctly or risk blowback from regulators and customers.

The number of IoT-enabled devices is exploding, with 39 billion connected devices estimated to be live and connected by 2030.

The rise in IoT devices will rapidly increase the number of so-called ‘digital customers’: connected devices that act on behalf of consumers and organisations to deliver information and even transact without the need for human intervention.

The shift towards digital customers will change how businesses provide CX, moving away from outdated methods of communication and updating processes that were created in a less digitalized world.

The increased number of digital customers will see the data they create come under more scrutiny. For example, in the UK, the Information Commissioner’s Office (ICO) is actively examining IoT consumer privacy, and under current plans, any data sent by IoT could be classed as personal data, highlighting the vast impact regulations are likely to have on data usage.

Digital customers will also increasingly be managed by agentic AI. The rise in data collection and processing required for AI to make decisions and deliver outcomes will put pressure on businesses to securely process and govern all that data.

To make the most of the benefits of agentic AI, organisations must comply with fast-evolving data regulations, all whilst maintaining seamless, personalised customer experiences.

How Can Organisations Prepare For Increasing Regulatory Uncertainty Around Data?

Organisations can take steps now to gain more control of their data strategy by strengthening cybersecurity practices, developing a clear geographic data storage approach and performing rigorous due diligence on their technology partners to ensure long-term compliance.

As with all new and developing technologies, regulation is lagging far behind the cutting edge.

While it’s impossible to predict what kind of regulations will be introduced in the future, businesses can get ahead by ensuring the right foundations are in place now and auditing current data processing, storage and governance procedures to identify areas that need improvement.

Having flexibility is key since whatever the regulations are today, they definitely won’t be the same tomorrow, nor will they ever be consistent around the world.

New innovations in AI, and sometimes good old-fashioned moral panic, will push governments and regulators to create and change the rules and business must comply with these changing requirements at short notice, or face reputational damage and hefty penalties.

What is Data Sovereignty, And Why is it Important With More Data Coming Into the CX Department?

Governments want to prevent the personal data of their citizens from falling into the hands of overseas actors, some of whom may be hostile.

Data sovereignty is about data being subject to the laws and regulations of the country in which it is stored or processed, and will be something CX leaders have to become more aware of as they increasingly process more and richer data.

Requirements to store and process data within certain regions, such as the US or the EU, are growing and will be a key consideration as data volumes and AI usage expands.

Is The Public Cloud The Best Option For Scaling to Meet Rising Data Volumes?

Although the so-called ‘public cloud’ is often still seen as a non-physical solution, cloud infrastructures have always been owned by somebody and tied to physical locations under national jurisdictions.

Organisations must understand exactly where their customer and IoT data resides and is processed, and by whom, in order to manage regulatory and legal risk. It’s not enough to blindly trust in the cookie-cutter strategies of hyper-scalers simply because they can offer capacity.

Organisations need to understand their data, keep abreast of the regulatory environment, and work with a partner who will help navigate uncertainty.

Private cloud, which can scale just as effectively and where data sovereignty, privacy and jurisdiction can be guaranteed, will continue to rise in popularity as it offers greater, more granular control, essential for storing and processing sensitive customer data, especially in sectors such as healthcare or finance.

More than ever, finding the right provider is crucial to ensure all necessary needs are met, now and in the future.

Find out more about how the boundaries of data are expanding within CX and what organisations need to act on in order to succeed in Content Guru’s recent blog post.

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